Banking chiefs mobilise to defend monster profits; Future Fund boss David Murray calls the Treasurer's bank bashing campaign "simplistic"

The debate over what, if anything, will be passed on from today's anticipated rate cut has deepened the stoush between banks and the federal government.

Throughout the morning the Treasurer and banking chiefs have been duelling in public about the impact of higher funding costs on multi billion dollar bank profits.

Most economists expect the Reserve Bank to cut the cash rate by a quarter of a percentage point when makes its decision known later this afternoon

The chairman of the Future Fund David Murray - himself a former chief executive of the Commonwealth Bank - said the government's campaign amount to political pressure.

And he told me on the AM  program that Wayne Swan's call for banks to pass on any rate cut in full was "simplistic".

Listen to the interview and my analysis here.