Banks must understand white-hot anger: PM

Prime Minister Julia Gillard has warned banks it's time they understood "white hot
anger" in the community on the issue of interest rates.
The federal government has been under pressure since the Commonwealth Bank,
Australia's biggest lender, raised its standard variable mortgage rates by 45 basis
points.
That is almost double the quarter of a percentage point rate rise announced by the
Reserve Bank on Melbourne Cup Day.
Ms Gillard said the government was determined to do more in the area of banking
reform, but caution was necessary to ensure the changes encouraged increased
competition.
"We need to be careful here," the prime minister told the Adelaide Rotary Club on
Tuesday.
"Any changes we make, we need to get right."
While the government had moved to crack down on mortgage exit fees, it wanted to do
more, Ms Gillard said.
"I understand the community's white hot anger and it's time the banks understood
that white hot anger, too," she said.
Financial comparison website RateCity said the ANZ had lifted interest rates for
fixed rate home loans by up to nine basis points since the Reserve Bank lifted the
cash rate by 25 basis points a week ago.
While it lowered the rate on its three-year fixed rate mortgage, ANZ raised its
rates on one, two, four and five-year fixed home loans, RateCity said.
None of the bank's major rivals had moved their fixed home loan rates and ANZ had
remained silent, along with the National Australia Bank and Westpac, on any increase
in standard variable home loan rates.
The Commonwealth Bank was the first to lift its variable rate last Tuesday and was
followed by 10 other lenders, mainly credit unions and building societies.
Opposition treasury spokesman Joe Hockey has challenged Treasurer Wayne Swan to
front a community forum in western Sydney on the issue of interest rates.
Mr Swan said he would wait until after the government announces its banking reforms
next month before responding to the challenge.
"When I've completed that, I'm more than happy to talk to the Australian people
about why that's important and why Mr Hockey's just been pulling a stunt," Mr Swan
told Sky News.
Although the government had started cracking down on excessive mortgage exit fees,
more had to be done to address the high salaries of senior bank executives, the
treasurer said.
Bank customers face exit fees if they want to switch to a loan with another bank.
Meanwhile, the Australian Bankers' Association (ABA) on Tuesday criticised Mr
Hockey, saying the basis for much of his argument against the banks was incorrect.
"Many of Mr Hockey's claims are based on an assertion that taxpayers' money is at
risk, therefore government should have greater control over banks," ABA chief
executive Steven Munchenberg said.
Under the deposit guarantee, any bank or financial institution that were to collapse
would be supported by a levy on the rest of the industry, not with taxpayer funds,
Mr Munchenberg said.
"Far from being underwritten by taxpayers, it is the industry itself that
underwrites the deposit guarantee," he said.
"A shadow treasurer should be aware of that simple fact."
Banks recognised the benefit of the wholesale deposit guarantee introduced during
the global financial crisis, but that was not a justification for "intrusive
government intervention" in the banking system, Mr Munchenberg said.