The Reserve Bank of Australia’s Assistant Govenor, Guy Debelle, has hit out at the country’s banks for raising interest rates to shield their profits from increased borrowing costs during the global financial crisis.

 

“Financial institutions have increased their lending rates in the face of the increase in costs to maintain their net interest margins within the range observed in recent years.[2] In turn, this has been with the aim of maintaining profitability,” Mr Dubelle said in an address to the Australian DCM Summit.

 

Mr Dubelle said that overall funding costs for banks had continued to fall since 2011, with the banks not dropping their interest rates as costs dropped.

 

"In turn, that has been with the aim of maintaining profitability,” Mr Dubelle said.

 

A transcript of Mr Dubelle’s speech can be found here