'Banks, like other businesses, run the risk of breaching the Trade Practices Act 1974 if they 'telegraph' possible rises in interest rates to their competitors - and especially when they refer publicly to specific numbers such as 'up to 0.5 percentage points', Australian Competition and Consumer Commission Chairman, Professor Allan Fels, said today.
Professor Fels was responding to reports in the press that the head of the ANZ Bank 'had taken the highly unusual step of telegraphing a rise in home loan interest rates early in the New Year', Australian Financial Review, page 3, 23 December 1999.
'The Trade Practices Act prohibits contracts, arrangements or understandings that have the purpose or effect of 'fixing, controlling or maintaining prices'. Courts have been prepared to infer understandings from public comments in some instances in the past,' he said.
The ACCC will maintain a close watch on bank behaviour in the coming period to ensure that there is no collusion, he said.
Professor Fels was responding to reports in the press that the head of the ANZ Bank 'had taken the highly unusual step of telegraphing a rise in home loan interest rates early in the New Year', Australian Financial Review, page 3, 23 December 1999.
'The Trade Practices Act prohibits contracts, arrangements or understandings that have the purpose or effect of 'fixing, controlling or maintaining prices'. Courts have been prepared to infer understandings from public comments in some instances in the past,' he said.
The ACCC will maintain a close watch on bank behaviour in the coming period to ensure that there is no collusion, he said.