USER VIEWS
4.8 The concerns voiced in the review primarily related to the indirect fees component of the Deposit and loan facilities index. Some of the concerns raised by users were:
- the weight assigned to Deposit and loan facilities and the consequent impact of the index on the All groups CPI;
- the volatility of the Deposit and loan facilities index, and whether this volatility is representative of indirectly measured financial service prices;
- the correlation between changes in the official cash rate target and the Deposit and loan facilities index, and whether this correlation is representative of indirectly measured financial service prices;
- the Deposit and loan facilities index sampling methodology;
- the treatment of products with fixed interest rates;
- the lack of international comparability;
- a perceived lack of transparency due to difficulties experienced in replicating the Deposit and loan facilities index, and difficulties explaining movements in the index;
- the best way to calculate the reference rate;
- the quality/robustness of the underlying data;
- the complexity of the calculation method; and
- the impact of changes in wholesale funding costs on the Deposit and loan facilities index calculation.
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