RBA underestimated sub-prime crisis: Costello

Thursday October 9, 2008, 9:28 pm Former federal treasurer Peter Costello says Australia's Reserve Bank should not have raised interest rates from last November. In response to the global credit crisis, six central banks from around the world cut interest rates yesterday and earlier in the week the Australian Reserve Bank slashed rates by one full percentage point. Mr Costello says he believes Australia is well-placed to ride out a world recession. However, he says the Reserve Bank should have realised the seriousness of the sub-prime mortgage crisis when it first emerged in August last year. "The bank underestimated the full dimension of the sub-prime crisis in the earlier part of this... [read full story]