Looking at how the banks make interest rate decisions

From www.mpamagazine.com.au

The ACCC is due to release its interim report into residential mortgage pricing in early March. A key focus of this will be on how the major banks balance the interests of consumers and shareholders when making their interest rate decisions.

Back in June 2017, the banks indicated that rate increases were primarily due to APRA’s regulatory requirements, but once under further scrutiny they admitted that other factors contributed to the decision, including profitability.

In December, the ACCC was called on by the House of Representatives Standing Committee on Economics to examine the banks’ decisions to increase rates for existing customers despite APRA’s speed limit only targeting new borrowers.

“It will be a very interesting report. It will be something that you’ll all be interested in. ... We’ve got to bring that together, we’ve got to present that to the Treasurer and then we’ve got to make it public," Sims said.