market will bleed again on monday, page-15

Banks raise interest rates on top of RBA to cover borrowing costs caused by US slow down. Cover borrowing costs to to cover what? It is to cover the loss of profits and shareholder returns but still will be generating massive profits well over 5%. In simple terms, the mortgagees are to pay more to maintain their high returns to maintain shareholder returns and high salaries and payouts to their executives and staff?

When US banks were in trouble in early 1990’s, they went on with very low returns and even on negative returns for years. Interesting to see what profit numbers our banks will put out with all that increased borrowing costs.