I have to say I am grumpy. I've just heard about the banks starting to introduce interest rate increases above and beyond those that result from increases in the cash rate. I know it was discussed as a possibility before the election, but it is no surprise that they waited until after the election to actually do it. The reason is obvious, they didn't want to become part of the political debate, particularly as the election rhetoric of both parties would have been to take steps to stop the banks.
Now, everyone can see that banks margins are under pressure, particularly if you look to the short term movements in markets. However, the banks have aggressively chased instruments, such as securitisation, to improve margins in the last decade (and beyond) with spectacular success. Given the profits they have generated, it would seem, and I am happy for someone to argue otherwise, that they had capacity to pass on some of that benefit to their customers, but chose not to do so.
Now, when the markets ebb, well perhaps more than ebb, in the opposite direction they demand that the customers compensate them for such market movements.
Isn't this having an each way bet.
I'm sure, that when profits are announced in 12 months time we will see profits that are higher than this year. And, they will be announced as having been achieved in an increasingly difficult market. Fagan hell.