Australian banks are borrowing at cheaper rates than at any stage since the financial crisis in the wake of the European Central Bank’s move to cut interest rates last week, with Australian homeowners potentially winning out, The Australian Financial Review reports.
Some of the nation’s largest banks are already cashing in on the ECB decision, with ANZ Bank raising $US2.25 billion ($2.4bn) in New York earlier this week, while Westpac recently sold $2.5bn of residential mortgage-backed securities (RMBS), Macquarie Group offloaded $1.04bn of asset-based securities and ING Australia wrapped up a $1.25bn RMBS deal, according to the AFR.
The ability to raise cash cheaply offshore should see lending competition in the hot housing market remain strong, amid concerns from the Australian Prudential Regulation Authority that lending standards may be dropping.
“APRA is seeing increasing evidence of lending with higher-risk characteristics and it does not want this trend to continue,” APRA chairman John Laker said in May.