High bank costs for Australia's Big 4 attributed to Euro crisis

A senior offical of Australia's Reserve Bank attributed claims by the big four banks that funding costs are rising to the European crisis.

Assistant governor Guy Debelle said world markets were demanding higher interest rates on bank debt and this had "clearly affected the Australian banks' wholesale funding costs".

However, Dr Debelle said that the Reserve Bank would take account of the rise in mortgage costs in its future setting of rates. He said: "We take into account the overall financial conditions in the economy, including the mortgage rate, in determining the cash rate."

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