Michael Pascoe endorses macroprudential

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Mr Michael Pascoe, well done:

Reserve Bank governor Glenn Stevens brought (metaphorically) his hose to this morning’s House of Representatives economics committee hearing and proceeded to use it on every issue thrown at him in the first session – except for households’ housing debt.

Stevens said household credit growth for housing of 5 or 6 per cent was “OK”, but he wouldn’t want to see it back to double digits again…The bank is comfortable with the present household credit growth, but it wants to see more business credit growth.

…It would be nice if one of the politicians pushed further on the alternatives available to the bank – the macro-prudential constraints being tried in New Zealand.

The politicians won’t ask because they don’t want it. Kudos, Michael Pascoe. Please pursue at greater length!

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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.