“Mad” Adam says “no” to macroprudential

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“Mad” Adam Carr has a positive spin on things for housing investors today:

Some recent signals indicate that regulators are taking a step back from employing macro-prudential policies in the property market, although calls for a regulatory response will no doubt step up following strong house price growth in October… both regulators appear to be playing down its use, instead preferring to act within the ‘existing prudential framework’.

…Whatever action is taken, regulators are seeking to reassure the market that steps will be modest. Given the ‘last bout of speculative excess in 2002-03 ‘ended in a fizzle not a bust’, the RBA and APRA are obviously satisfied with the steps that were taken during that period — notably that didn’t include what has come to be known as macro-prudential regulation.

And on it goes with selected quotes from various regulators suggesting nothing much is coming.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.