The banks of this country are complaining about accumulating money … “People don’t want money”

Although people love money, the situation in Australia is different, with banks complaining about the abundance of money and the reluctance of the family sector to acquire it at almost free cost.

The Australian government has pumped billions of dollars into the economy as part of its plan to recover from the recession caused by the ‘Corona’ virus, as well as cut interest rates to record levels, and plans to support wages.

It has also prepared new plans to boost demand for credit, including the abolition of ‘responsible lending’ laws, and the Reserve Bank of Australia is preparing to cut the interest rate again to zero, 1% and increase provisions for the bond buyback plan, which will inject more money into Economy.

According to Australian bankers, “we don’t need more liquidity”.

For his part, Shane Elliott, President of Australia and New Zealand Banking Group Ltd., said: “There is all this liquidity flowing and there is no equivalent use of this product, because the people don’t want it. “

He added to the UK’s “Sky News” network: “Money is basically free today. Lowering its cost doesn’t change anything.”

The bank’s profits fell 40%, and Elliott noted that the abundance of liquidity greatly affected the bank’s earnings margins, with the net interest margin shrinking by more than 3% in the early 2000s. for the four major lenders at over A little about 2% now.

Among the reasons people are reluctant to borrow more is that the debt-to-income ratio of the household sector in Australia is at an all-time high of almost 200% compared to an average level below 150% in 22 advanced economies.

At the height of the COVID-19 outbreak, credit growth in Australia declined as workers and businesses held onto cash, with banks losing around 10% of their monthly loan repayments.

Although there are signs of recovery, with signs of economic growth, the overall outlook remains bleak, business bankruptcies are expected to increase and unemployment is expected to remain high for a long time.

“Liquidity is not the problem at all, and the big banks are overwhelmed by the challenges of dealing with their existing customers, so they have been more careful in lending to new customers,” said Joseph Healy, managing director of Judo Bank.