"Just because the RBA keeps the cash rate on hold, that doesn't mean banks won't raise their rates if funding costs for them rise. They are not in the business of soaking up rises in funding costs internally, they are in the business of passing them on to their customers."
Javanco - you are so right.
I hope that no one, be they property bull or bear, thinks that banks are, or could ever be 'on their side'. Pre- 1980s, banks actually did have a sense of social as well as fiscal responsibility. Now they have none of the former and very little of the latter. An insane asset boom coupled with govt created moral hazard (ie bank guarantees) and extortionate bank executive remuneration, have created a perfect storm of greed. If you were a bank exec and were earning Giga-bucks for keeping the Aussie super-dream alive, churning out lounge room millionaires, and had a govt guaranteed liferaft with a golden parachute tucked into it, would you really care where you got your funding from and to whom you loaned it to? Greed is a dominant and very powerful human trait - ultimately destructive and there is no vaccine against it.
