National Australia Bank managing director John Stewart told the
Financial Review that "once things settle - and probably once there is no election looming - prices will rise because credit is underpriced."
Stewart told the newspaper that "the price of credit has gone up and it won't be as cheap for a long time, and at some point that will be passed on.
"So far, none [of the major banks] has done that. You don't want to stick your head above the parapet."
Interest rates charged by have increased on many corporate and commercial loans tied to wholesale interest rates (such as the bank bill rate). Major banks have also lifted personal loan and credit card interest rates in many cases over the last couple of months as the cost of funds has escalated thanks to the global liquidity crunch.
Major banks and most retail banks have not, however, lifted interest rates on home loans - a sensitive category given Australia's general election.
Plenty of niche lenders have lifted interest rates though not in all cases in line with their higher cost of funds. Some retail banks have also lifted interest rates on low doc home loans (though not full doc loans).