This past week we have seen variable pricing increase at a number of lenders.
With new International Financial Reporting Standards (IFRS) coming into effect for financial periods beginning on or after 1 January 2011, these standards will make all Financial Institutions include securitized assets on their balance sheet when calculating capital ratios (meaning they need to keep more money set aside, which is more expensive for them), and these costs ultimately make their way down to the consumer. Fixed rates have somewhat been accounting for this already, which is why we’ve seen rates where they are with spreads where they are. And now we are also seeing the effect on variable rates as well.
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