banks to costello

"mind your own business, Djck head!" (or words to that effect! There's just NO honour among crims!

Banks to Costello: mind your own business
By business editor Peter Ryan

Posted 2 hours 16 minutes ago
Updated 1 hour 16 minutes ago

The banks have told Peter Costello to butt out (file photo). (ABC News: Damien Larkins)

Two of Australia's biggest banks have politely told Treasurer Peter Costello to butt out of their business, saying decisions on how to set mortgage rates are theirs alone.

Mr Costello has again warned the banks not to use the subprime meltdown in the United States as an excuse to push up home loan rates.

In response both the chairman of the National Australia Bank, Michael Chaney, and the chief executive of the ANZ, Michael Smith, have firmly indicated that they will respond to commercial not political pressure.

Speaking after a Business Council of Australia dinner in Sydney last night marking the end of his presidency, Mr Chaney said the Treasurer's comments needed to be viewed in the context of the election campaign.

"One can understand the Treasurer during an election campaign providing that sort of advice but at the end of the day the banks will do what they have to do to protect their company and their depositors," Mr Chaney said.

Unveiling the ANZ's annual profit this morning - a record $4.18 billion - chief executive Michael Smith warned that Australian banks could not avoid the current global uncertainty.

And he refused to rule out passing on the additional cost of money to consumers.

"The Australian banking system is more dependent on wholesale funding that probably any other OECD market as a system. Therefore the repricing of risk and the increase in funding costs is obviously going to have an impact," Mr Smith said.

Earlier this week, National Australia Bank boss John Stewart told a newspaper that the higher price of credit would need to passed on at some point.