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Banks defend their position on rates

The big banks have defended their position on interest rates, with the Australian Bankers Association claiming that the banks should be allowed to ramp-up pricing on loans, or hold onto further interest rate cuts to bolster profits in the face of a slowing economy.

The comments are likely to cause outrage with industry groups and consumers, after the big banks have been criticised from the Government over their refusal to pass on the latest cut to interest rates by the RBA.

The banks have been accused of profiteering on mortgages, but the ABA yesterday defended it’s position, pointing out that bank interest margins “”remain at extremely low levels.”

The bankers assosciation maintained that low margins could put the banking sector at risk.

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