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NAB’s chief executive Cameron Clyne has put his weight behind a proposal that would see banks publishing the benchmark cost-of-funds rate.
According to a report in The Australian, Mr Clyne said publishing the benchmark rate would help soothe the heated debate surrounding variable mortgage rate movements disconnected from the official cash rate.
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"Bank funding is becoming more expensive -- the marginal cost is easing but the average cost is rising -- and it will also increase due to stronger regulatory standards on things like capital and liquidity," Mr Clyne told the paper.
According to Mr Clyne, the benchmark would be calculated from several key inputs such as the 90-day bank bill rate and other measures, and would help customers and brokers predict future interest rate movements now that banks were adjusting rates independently of Reserve Bank monetary policy.
