Glenn Freeman: So, David, it's been an interesting week for the banking sector. Just late last week, we had Westpac moving on rates. We had another two banks since then also announce on rates. And this is coming on the back of the Reserve Bank staying pat again on the official rates. What's going on here?

David Ellis: Yeah. Simply, it's wholesale funding costs. So, this is affecting all banks, not just the major banks but all banks in Australia. We've seen for the last six months the short-term wholesale funding costs remaining elevated. So, the gap between the Reserve Bank cash rate and the benchmark money market rate, it's been about 0.5 per cent, 50 basis points. Normally, over the long period, that's pretty much flat. So, we've got elevated funding costs. As I said, it's affecting all banks. We saw pretty much all the smaller banks increase their variable home loan rates in June and July. The major banks, three of the four major banks, as you pointed out, have just recently increased variable home loan rates. And I would estimate, or I'd speculate that the delay for the major banks in announcing those increases in interest rates is due to the Royal Commission and the intense political and media scrutiny facing the major banks. But three of them have moved. You said you've seen Westpac 14 basis points, ANZ 16 and Commonwealth Bank 15.

Freeman: And how have they fared in response to that? So, obviously, they have delayed as long as they could in light of what's been happening with the Royal Commission. Has sentiment been pretty poisoned against them and has the share price reacted? Or what's happened there?

Ellis: Well, I would argue that Westpac going first – so, they increased their rates on last Wednesday, 29 August. I think they got through that pretty well. Obviously, they have got a lot of negative publicity from the Prime Minister and politicians. The reason I think that the major banks have been able to increase the interest rates without too much damage is being – it's quite clear, and in my mind, justified the reason for the increase. And that is the sharp increase in short-term wholesale funding costs. They are higher than longer-term averages and they remain elevated. And as an increasing argument that the increase in short-term rates is structural not cyclical.

Freeman: And the other thing that's also come out in the last couple of days is whether it's actually a meaningful shift or not but speculation about Westpac shopping around its salaried wealth advice channel. What's your take on that? Is that something that happens all the time and it's just the timing is now making people sit up and ask questions? Or is it actually something else?

Ellis: Well, it's too early to make a definitive comment. It is media speculation. Westpac haven't responded – as far as I know – haven't responded or confirmed that the bank is reviewing certain parts of its wealth business. I wouldn't be surprised if the bank is undertaking a review. Obviously, the three other major banks, CBA, ANZ and National Australia Bank, are all in the process of selling or demerging or dealing with parts of their own wealth businesses, whereas Westpac until – Westpac CEO recently confirmed that Westpac was happy with the way that their wealth business was operating and integrated into the bank. So, we'll just have to wait and see. Too early. But if in fact it does happen, I wouldn't be surprised considering particularly the intense negative publicity that the bank wealth businesses have received from the Royal Commission over the last few months.