Family First senator Steven Fielding has said that the banks must be able to justify unnecessary increases in their interest rates.
Senator Fielding has introduced legislation to the upper house to tighten controls on home loan interest rates, in a move designed to stop the banks from hiding behind commonwealth-backed guarantees of deposits if they make unaccountable decisions on interest rates.
Under the measure the big banks would need the Treasurer’s approval if they wanted to withhold a rate cut or increase rates beyond the Reserve Bank adjustments. If a bank’s reasoning does not sway the Treasurer and the bank still insists on increasing interest rates, it would lose access to the deposit guarantee scheme.
According to Fielding, banks need to understand that “government assistance comes with responsibility.”
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