The banks of this country are complaining about accumulating money … “People do not want money”

Although individuals love money, the situation in Australia is different, with banks complaining about the abundance of money and the unwillingness 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 lower interest rates to record levels, and plans to support wages.

It also prepared new plans to stimulate 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 0.1%, and increase the provisions for the bond repurchase plan, which will pump more money into Economy.

According to Australian bankers, “We don’t need more cash.”

For his part, Shane Elliott, Chairman of the “Australia and New Zealand Banking Group” Ltd., said: “There is all this liquidity flowing and there is no matched use of it product, because people do not want it.”

He added to the British “Sky News” network, “The money is basically free today. Lowering its cost does not change anything.”

The bank’s profits fell by 40%, and Elliott commented that the abundance of liquidity greatly affected the margins of the bank’s results, as the net interest margin decreased from more than 3% in the early 2000s for the four major lenders to more than A little less 2% now.

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

At the height of the COVID-19 pandemic, credit growth in Australia shrank as workers and companies retained cash, with banks losing about 10% of their monthly loan repayments.

Although there are signs of recovery, with signs of economic growth, the overall outlook remains bleak, with business failures expected to rise and unemployment likely to remain high for a long time to come.

“Liquidity is not the problem at all,” said Joseph Healy, chief executive of Judo Bank, “and major banks are overwhelmed by the challenges of dealing with their existing clients, so they have been more cautious in lending to new clients.”

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