About
Articles
Monographs
Working Papers
Reviews
Archive
Contact
 
 

3.75 is the New 4.75

So says Deputy Governor Ric Battellino of the RBA’s official cash rate.  Battellino’s speech once again highlights the fact that the RBA calibrates changes in the official cash rate to changes in actual borrowing rates.  Battellino also notes that:

The margin on variable housing loans is much the same today as it was at the start of the crisis.

All this makes the whole political pantomime of bank-bashing rather pointless.  It is also the case that the RBA will probably discount the implications of tighter bank capital regulation for retail borrowing rates in its future setting of the official cash rate.  The equilibrium official cash rate may shift even lower as a result.

posted on 16 December 2009 by skirchner in Economics, Financial Markets, Monetary Policy

(0) Comments | Permalink | Main

| More

Next entry: (Not So) Outrageous Predictions for 2010

Previous entry: Big Government Fails Treasury's 'Wellbeing' Test

Follow insteconomics on Twitter