Absolutes....how funny. Do you honestly think banks borrow at 0.75%? if you do they I suggest you go research how banks work. Go look at what banks pay on savings accounts a key borrowing for banks. Also there are not enough saving accounts for the banks to fund the amount borrowed for housing so they have to go borrow from investors outside Australia. Now go look at what banks pay for that funding. Not that had it is published but currently averages around 2% for 5 year funding (factoring a 3 month base rate + the credit spread margin). Then there is capital funding which is even more expense, CBA's latest issue is the 3 month rate +3% Now do your sums...
Banks margins have plummeted. The consequences of that will be lower profits which leads to the Government getting less tax and less income for pensioners.
Nobody is winning at the moment, and definitely not the banks. And weak banks = weak economy and low growth.
