Peter Costello, treasurer in the Australian government, told
ABC television last night that "there are no grounds whatsoever for any of the banks to use the US sub-prime fallout as a reason to put up home mortgages.
"There are no grounds and this government has made it entirely clear to the banks that they should not be doing it."
Banks have already lifted interest rates on plenty of categories of loans just not, in the main, on the politically sensitive category of residential mortgages.
National Australia Bank managing director John Stewart told the Financial Review in an article published yesterday, that "once things settle - and probably once there is no election looming - prices will rise because credit is underpriced."