anz adds to mortgage pain, page-21

I find it difficult to imagine any Aussie bank can create money???? I am under the belief that any shortfalls banks have when they lend are borrowed from the international money market.......isn't that also the real reason why interest rates have risen outside reserve bank levels?

Less of the international suppliers are currently willing to put their cash up and are much more cautious after the US Sub-prime fiasco causing the cost of wholesale funding to go up considerably. Thus the increase has nothing to do with the Opes drama and it would be silly to make such a connection.

On the government front - they will not stop any of the banks/credit unions from such rises unless they want the economy to stop dead. The only other scenario that would play out if the govt stepped in would be banks would stop lending money and that my friends would be a disaster!

Just my thoughts though.
SLE