RBA Kent:Bks Avg Outstanding Funding Rate -10bps Since Last Yr

-Material change in bank funding cost affect financial conditions

By Sophia Rodrigues

     SYDNEY (MNI) - A material change in the cost of funds for banks will

contribute to changes in financial conditions and have implications for the

wider economy, Reserve Bank of Australia Assistant Gov. Christopher Kent said

Wednesday.

     At present there is no such pressure because marginal rates of funding are

a little below the average outstanding rates -- which have declined close to 10

basis points since late last year, Kent said in a speech at a Bloomberg event at

Sydney.

     Kent said that despite recent increases in long-term government bond yields

across a range of advanced economies yields on longer-term government debt are

still quite low. Monetary policy remains very accommodative across advanced

economies and inflation remains low. 

     Given the decline in bank bond spreads since mid 2016 the same is true of

the costs of bank funding in longer-term wholesale debt markets, he said.

Funding costs in short-term debt markets are low, too.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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