THE Australian Greens have called for laws regulating banks to be strengthened to prevent customers being gouged by rate rises beyond moves by the Reserve Bank (RBA).
The RBA today left the cash rate on hold at 4.5 per cent.
It means monthly repayments on an average $300,000 standard variable home loan should remain at $2070.
But borrowers could actually still face a rise in their monthly repayments if retail banks, as expected, hike their mortgage rates.
The banks are continuing to argue the cost of obtaining funds in international markets has become more expensive, and that they must raise mortgage rates to protect profits.
The Greens have backed a warning from Treasurer Wayne Swan calling on the banks to not act independently, or use rises in the cash rate as an excuse to gouge customers, but say more should be done to protect borrowers.
Greens senator Christine Milne today rejected suggestions there was little the Government could do to control the banks.
Senator Milne said the Greens would work with Labor in an effort to have a range of measures introduced including scrapping the $2 fee on ATM use and capping exit fees on mortgage products.
But they also are now calling for it to be mandatory for banks to have at least one product which has a fixed gap between the costs to the financial institution of borrowing the money and the rate at which it lends it out.
"Banks are working in a regulatory environment," Senator Milne said.
"Governments have an opportunity to oversee and we want to make sure that yes the cost of borrowing money for banks is taken into account, but equally that there is not an opportunity to gouge as far as the community is concerned."
Earlier, Mr Swan said there was "absolutely no justification whatsoever" for retail banks to move over and above any decision taken by RBA.
"Their profits are very healthy. Their net interest margins are back to levels that we saw prior to the global financial crisis, and their impairment levels are coming down."
CourierMail.com.au
