No windfall in banks' funding costs

Borrowers would only receive an interest rate cut of 0.1 percentage points if banks decided to pass on the fall in their funding costs to customers, a new report says.

By InvestSMART · 11 Apr 2013

By InvestSMART ·
11 Apr 2013

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Borrowers would only receive an interest rate cut of 0.1 percentage points if banks decided to pass on the fall in their funding costs to customers, a new report says.

Although the cost of new wholesale money has this year slumped to its lowest level since 2009, a report by JPMorgan suggests banks are unlikely to use the windfall to start a price war.

Whether customers received larger "out-of-cycle" cuts would depend on the price of deposits, which continue to fund most of their lending growth, it says.

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No windfall in banks' funding costs

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