The Reserve Bank of Australia claims a decrease in lending to businesses and households has helped contain the prevailing economy.

The RBA, challenged by the threat of surging inflation, reiterated its monetary policy stance of increasing rates despite the strong dollar if inflation rises to 4% from the current level of 3.25%. However a decline in excess cash within the economy has abetted the central bank in its efforts. read more..

Rob Coombe, head of Westpac business and retail banking, warned that major banks throughout the country will likely be forced to raise rates regardless of any action from the Reserve Bank of Australia, in response to higher funding costs. read more..

During the past year, the sums collected by Australia’s biggest banks through penalty fees increased, as struggling borrowers fell behind on payments.

The news is somewhat surprising, as banks have lowered the levels of penalty fees charged to individual accounts throughout the year. However, because the number of penalty fees collected has risen, the cumulative amount collected on loans has increased by 9 per cent, costing borrowers almost $540 million. read more..

Economists fear rising levels of debt combined with an imminent interest rate hike could lead to increasing defaults amongst Australian consumers. However, other economists believe the strength being displayed by the economy, specifically the optimistic employment outlook, will strengthen individual wealth, and therefore bankruptcy is not a concern. read more..

Bob Brown and other Green members of Parliament plan to introduce regulations to limit banking fees and charges. According to a recent research report, Australians pay about $1000 per annum on banking fees – 10% more than Americans and 22% more than Brits.

In the meantime consumer must take personal responsibility. Here are some of the best banking deals to save that $1000 per year. read more..