Proposed legislation to restrict bank interest rates in Aussie
This comes two weeks after the Reserve Bank of Australia (RBA) increased the cash rate by 25 basis points to 4.75%, in a move that took the market by surprise. Following this rate rise, all of the four major Australian banks raised their mortgage rates.
CBA was the first major bank to announce an increase, with ANZ, NAB and Westpac following suit shortly.
However, the banks have incurred a heavy backlash from the public, due to raising their rates in excess of the 25 basis point RBA increase. For example, CBA raised its standard variable mortgage rate by 45 basis points.
As a result of the backlash against bank mortgage rate rises, the Australian Greens Party has first of all proposed legislation that would give the Australian Prudential Regulatory Authority (APRA) power to prevent mortgage rate rises that exceed increases in the banks' financing costs.
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