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Tuesday, February 27, 2024

Australian banks have ‘too much money’, more may be on the way

Customers using ATMs at Australia’s “Big Four” banks – Australia and New Zealand Banking Group Ltd (bottom R), Commonwealth Bank of Australia (top R), National Australia Bank Ltd (bottom L) and Westpac Banking Corp (top L). (Photo combo: Reuters)

SYDNEY: Australia’s banking system has more money than it can use, a challenge that will likely grow next week with the central bank widely expected to trim interest rates to near zero and boost the amount of bonds it buys.

With the country trying to emerge from a Covid-induced recession, fiscal and monetary authorities have pumped billions of dollars in cash into the economy, cut interest rates to a record low and introduced a wage subsidy scheme.

Further measures to spur credit demand are on the cards, including scrapping “responsible lending” laws, and on…

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