2 Jul 2009

Govt accused of kow-towing to banks over interest rates

9:37 am on 2 July 2009

The banking union, Finsec, has accused the Government of kow-towing to Australian-owned banks, after the Finance and Expenditure Select Committee voted against an inquiry into bank interest rates.

The Greens and Labour wanted the inquiry, after a report on the banks found they were failing to pass on the full amount of falls in the official cash rate.

Union campaign director Andrew Campbell says the Select Committee's decision shows the Government is either impotent or in the pocket of the banks. It says the banks are "rorting" the public and bank employees.

But the Select Committee chair Craig Foss says meetings with top bank officials as well as the Reserve Bank convinced him an inquiry was not needed.