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Bank discounts 'acts of desperation'

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Australian Broker | 19 Aug 2011, 06:30 AM Agree 0
Recent discounting moves by lenders are "acts of desperation", and will eventually disadvantage brokers and borrowers, a top broker has stated
  • Broker | 19 Aug 2011, 10:29 AM Agree 0
    All funded by cuts to brokers commissions!
  • QLD Broker | 19 Aug 2011, 10:34 AM Agree 0
    Do Australian Brokers news actually ever put anything positive out. Everyday it is doom and gloom. How about something positive as the industry isn't that bad.
  • Frank Paratore | 19 Aug 2011, 10:43 AM Agree 0
    How are cheaper rates a 'negative' for customers ? Banks are making more than adequate profit margins ..... Lets enjoy and view the glass as half full - not half empty !!
  • countrybroker | 19 Aug 2011, 10:44 AM Agree 0
    I basically agree these are desperate moves by the banks. To say the margins are skinny is probably not quite correct, as we know the traders ib=n fixed rates at the banks are very good at what they do and I believe that the reduction in rates is a reflection of the cost of funds for the banks today. It is more a move to keep and increase market share and to shift custmoers away from the variable rate market. To see what it is costing banks keep an eye on the BBSW rates piblished daily in the financial press. I do not think margins have shrunk at all. The reduction in fixed rate to be below the "discounted" variable rates avaliable is a very strong indicator as to where variable rates are headed, that is down.
  • oldBroker | 19 Aug 2011, 11:53 AM Agree 0
    This is rubbish. This is strictly supply-and-demand which is the basis of every industry (not just banking). The demand for a service/product decreases so the price will too. It's Economics 101.
  • Patrick | 19 Aug 2011, 03:05 PM Agree 0
    Fixed rate reductions are driven by reductions in wholesale swap rates which determine the cost of fixed rate money for banks. Swap rates have declined due to increased wholesale market expectation that the peak in this interest rate cycle has been reached and that economic circumstances are deteriorating. I doubt that bank margins on fixed rate loans have been reduced.
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