Lending to creditworthy borrowers, after all, is how banks earn profits. Getting that balance right is not always easy, but it is of utmost importance. Regulatory challenges for community banking Community bankers tell us repeatedly that they are concerned about the changing regulatory environment.
Graph 8  Yields on the major banks' bonds have declined in response to both lower risk-free yields and a decline in the spreads of bank bonds to these reference rates. Also, banks have passed through most of the cash-rate reductions to interest rates on retail deposits, which account for about a third of their debt funding.