Risks for borrowers higher than many realise

By Daryl Dixon
Updated April 23 2018 - 10:37pm, first published November 6 2014 - 12:16pm

Our major banks are lobbying hard to convince both the government and the Murray Financial System Inquiry that raising the mandatory capital reserve requirements will see borrowing costs rise and shareholder returns fall. As with all such special interest pleadings, this argument needs to be taken with a grain of salt, not least because higher capital revenue requirements will still leave our banking system over-invested in residential and commercial property debt.

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