An indication of the degree of competition for deposits is the extent to which there has been an increase in the cost of deposit funding relative to the cash rate since mid 2008: the average cost of the major banks’ new deposits is now only slightly below the cash rate, whereas prior to the onset of the financial crisis, deposit rates were about 150 basis points below the cash rate (Graph 4).
2  See Battellino R (2009), “Some Comments on Bank Funding”, Remarks to the 22nd Australasian Finance and Banking Conference, Sydney, 16 December 2009. BIS Review 171/2010  3  Graph 4  Competition has been strongest for term deposits.