Faster Than Expected Fed Rate Hikes Could Cost Australian Banks
- Commonwealth Bank watching U.S. economy ‘very carefully’
- ‘Unpredictable’ rate rises a possibility: Morningstar Inc.
Australian Lenders Risk Heavy Fed Hit
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The prospect that interest rate increases by the Federal Reserve will drive up bank funding costs looms particularly large about 15,000 kilometers away in Australia.
The four biggest banks there have historically gotten a bigger proportion of their funding from wholesale debt investors than peers in Europe and Japan, and the majority of that is sourced outside the local Aussie market.