13 July 2016 at 4:41 GMT
The biggest losers after Prime Minister Malcolm Turnbull scraped through to win Australia’s fractious election could be homebuyers facing higher costs on their AUD1.6 trillion ($1.2 trillion) in mortgages. The price to protect bonds issued by the nation’s banks climbed seven basis points last week after S&P Global Ratings cut its outlook on Australia’s AAA grade to negative on concern deficits will persist without “more forceful” decisions to rein in shortfalls. It also put the nation’s biggest lenders on notice. Moody’s Investors Service said it could be a “credit negative” if Turnbull can’t win agreement from the split upper house for plans to improve the government’s finances. “An increase in funding costs relating to a ratings downgrade will impact bank margins, but banks may choose to offset this via loan pricing,” said Anthony Ip, credit sector specialist at Citigroup Inc.
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