swan issues please explain to cba

The CBA won't be the only one asked to explain and if thats going to amke a difference.

February 06, 2008
FEDERAL Treasurer Wayne Swan says the Commonwealth Bank has "a lot" of explaining to do over its decision to lift home loan interest rates by more than yesterday's central bank adjustment.

He also indicated the Government was ready to deliver a package of changes that would make it easier for borrowers to switch banks if they felt unfairly treated.

The Commonwealth today announced it was increasing its variable home loan rate by 0.30 per cent to 8.97 per cent following the Reserve Bank of Australia's decision to lift official interest rates by 0.25 of a percentage point.

"I think the Commonwealth Bank has got a lot of explaining to do," Mr Swan said on Sydney radio 2SM.

"I've got a lot of sympathy for families who I think will be really furious today at the Commonwealth Bank for the timing of this announcement, taking the opportunity to further increase rates on the back of the Reserve Bank decision.

"I think people rightly will be furious with the Commonwealth Bank because families will take it very hard."

Mr Swan acknowledged that lenders were facing increased borrowing costs due to the fallout from the US sub-prime crisis.

"But I think that banks need to be very conscious of the tremendous financial pressure that families are under," he said.

"We want to have a competitive banking market out there, and those institutions that seek to increase their margins at this time I think will be judged very harshly by Australian families and by the Government."

Mr Swan said the Government was working on a package - to be delivered in the "next little while" - that made it easier for borrowers to switch banks if they thought they were not getting a fair go.

"I think people out there do need to have the capacity to vote with their feet," he said.