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The Federal Government is continuing its attack on the Commonwealth Bank for increasing its home loan rate.
The bank announced on Friday that it would increase its standard variable rate by 0.1 per cent.
Treasurer Wayne Swan and Prime Minister Kevin Rudd have both condemned the move.
Mr Rudd says the Commonwealth Bank should reconsider its position.
"Everyone in Australia is pulling together to try and lift the country out of the global recession," he said.
"I'd say to the Commonwealth Bank, join us and don't head in the wrong direction ... I think it would be good if everyone was on board for that."
Deputy Prime Minister Julia Gillard has told Channel Nine the Commonwealth Bank's decision goes against the Government's attempts to stimulate the economy.
"This is a decision the Government is rightly furious about and one we are describing as selfish because that's precisely the right word," she said.
"The Commonwealth Bank is acting in a selfish way.
- By Gus Leonisky at 15 Jun 2009 - 7:14am
- Gus Leonisky's blog
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raking it in...
A Reserve Bank report into banks' interest margins has found that they have grown during the global financial crisis.
Australian banks increased their interest margin (the gap between the rate they borrow for and the rate they lend at) by an average of 9 basis points (0.09 percentage points) during the peak of the global financial crisis in the six months to March this year.
Interest margins are a major source of bank profits, and the margin rise helps explain why Australian banks have limited profit declines in the face of large bad debt write-offs.
Banks picked up an additional 5 basis points in the six months prior to that, bringing their current average margin to 2.27 per cent, which the Reserve Bank says is "a little above the level before the onset of the financial market turbulence in mid-2007."
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see toon above...