The tightening of liquidity in global credit and money markets that started in August has worked in favour of the big Australian banks, according to the Reserve Bank of Australia.The latest statement on monetary policy says the increase in funding costs, above the 25 basis point increase in the cash rate in August, has been 10 to 15 basis points. Banks have borne some of this cost, passing on only the increase in cash rate on most home loans and also absorbing the cost on some business loans.That's the bad news. The good news for the banks is that while many third party funders, originators and non-conforming lenders have had to pull back on their lending to preserve scarce funding resources, the big banks have continued to lend normally.The RBA says the banks' domestic loan books increased by $40 billion in August and September, faster than the average rate of growth over the year to date. Banks were the only financial institutions able to continue sourcing funds from offshore capital markets, albeit at higher spreads. The RBA said banks' foreign liabilities increased by $13 billion in August and September, at the same rate of growth as recent years.The impact on borrowing rates has been mixed. While most banks' standard variable home loan rates increased by only 25 basis points between July and November, the rate on banks' prime low-doc loans has increased by an average of 35 basis points, and mortgage originators' prime low-doc loans by 43 basis points. Rates on non-conforming home loans have gone up by an average of 100 basis points.The RBA says these movements are only a partial reversal of the trends of the past few years. Between 2004 and 2006 the spread between interest rates on prime low-doc loans and prime full-doc loans declined from 100 basis points to 30.The spread on non-conforming housing loans declined by 120 basis points over the same period. The five big banks' average three-year fixed rate on prime full-doc loans is 7.9 per cent, 20 basis points higher over three months. Smaller banks' and mortgage originators' three-year fixed rates have increased by 30 to 35 basis points over the same period. While households have not had to cope with the full pass-through of the banks' higher cost of funds, business has borne the brunt - big business more than SMEs. The RBA says 45 per cent of business loans over $2 million are priced off bank bills. Rates on such loans rose 15 basis points in August and a further 30 basis points over the following two months.Another 40 per cent of large loans are at variable rates and a sizeable proportion of those are also priced off bank bills. Rates on those loans are estimated to have increased by 35 basis points over the past three months.Small business loans have tended to move in line with home loans; variable rate loans have risen only in line with the cash rate.