Gillard, in Seoul for the meeting of leaders from the Group of 20 major nations, said higher capital standards for banks globally under the Basel III accord would not justify the banks' rate hikes, because Australia has already secured special considerations for its well-capitalized banks.
"We don't want Australian banks to have any excuse from these new financial rules to excuse their arrogant conduct in putting up interest rates above and beyond reserve bank movements," Gillard told reporters on the sidelines of the meeting.
Australia and New Zealand Banking Group Ltd. (ANZ.AU), Australia's third-largest lender to home buyers, Wednesday increased its variable mortgage interest rate by 39 basis points a week after rival Commonwealth Bank of Australia (CBA.AU) hiked rates beyond a 25 basis point tightening by the Reserve Bank of Australia, the country's central bank.
Gillard said that in a meeting with South Korean President Lee Myung-bak, she and Lee both expressed their desire to "rapidly conclude" talks on an Australia-Korea free trade agreement, but she declined to give a specific timetable for the conclusion of talks.
On exchange rates and imbalances, which have already become highly contentious in G-20 discussions here, Gillard reiterated Australia's position that the world should move over time to "market-based mechanisms" for exchange rate movements.
-By Aaron Back, Dow Jones Newswires; 8610 8400 7799; aaron.back@dowjones.com
Source http://online.wsj.com/article/BT-CO-20101110-705258.html
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