Westpac is the latest bank to reduce its term deposit rates, cutting its local funding costs

But Todd McClay, the chairman of Parliament's Finance and Expenditure Committee issued a report, not 2 months ago, that said:

'Another potential benefit is that the reduced funding costs for banks from issuing covered bonds may be passed on to unsecured creditors if banks can pay higher deposit rates.'

What's going on Mr Chaston?  Perhaps you could ask Mr McClay for some clarification.

Because it looks like he is very wrong.

It will be argued that it would have dropped more if covered bonds hadn't been allowed. You know how these things go.

When people make statements like that, it might end up being true. Or it might end up being completely and utterly wrong. The problem is that the odious decision has been made. And realistically it is not going to be unwound. Everyone with a term deposit or a pre-covered bond, bond has had their security reduced. End of story. Bank profits go up. Open Bank Resolution is much more likely to be needed to be employed.

This persons professional reputation should fall in parallel with the term deposit rates along with those politicians who agreed with these shallow sorts of statements.

Well written comentary, Uninterested!

Familiar story, the support of financiers and banksters at the expense of savers, retirees, and today's tax payers, and thanks to defered accruals, our children, who will be tomorrows' taxpayers. 

Will they vote with their feet?

With sorrow,

HGW

The smarmy claims that covered bonds would lead to higher deposit rates is outrageous. More money supply options for banks is always bad news for local savers. But luckily for Mr Key and his colleagues, most voters are totally ignorant of covered bonds and banking politics.

"Savers are paying the price"...yes they are but with every news item about the rise in property values and decrease in real returns on savings, we can expect an increasing % of savers to bail out of feeding bank profits and into property speculation.

It is now too late for Wheeler to throttle the bubble...it is building quickly on the back of cheap credit and media reports.

Next step on the ladder will be the rise in the cost of building materials...and labour charges...both of which will not face govt concern because of the fat gst theft involved.

The climb up the ladder is underway and the outcome will be average house prices blasting above all previous levels...then.....crash.