THE DISTILLERY: Rates chicken

Most commentators can't help but take a side in the interest rates debate, to the exclusion of the full story.

The big four banks are playing a big game of chicken over their interest rate movements and the onlooking crowd – the commentators – are becoming increasingly agitated. The reason why the interest rate debate is so futile is it’s riddled with conflicting, or even unacknowledged, interests. Mortgage-holders want a rate cut, but they’re also depositors who want a rate hike. Sometimes they’re shareholders and want a healthy dividend, and sometimes they’re indirect shareholders through a super fund and don’t even know it. But they’re also taxpayers who want a stable financial environment so they offer a guarantee – a favour they expect to be repaid in more ways than one. It’s all very confusing, but most commentators can’t help but pick a side. Leading the charge for the banking sector is The Australian's John Durie, while for the mortgage holders it’s The Sydney Morning Herald’s Ian Verrender. While we’re on banking, The Age’s Michael West has an interesting angle on the new Standard & Poor’s ratings for our forgotten regional banks, while The Sydney Morning Herald’s Ross Gittins proves once again that he’s so much more than an economics editor.

But first, it’s The Australian’s John Durie, who issues the much-needed reminder that not all bank customers are mortgage-holders.


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