Banks ignore macroprudential threat

Tuesday 14 October 2014

The AFR is reporting this afternoon that Australia’s banks are ignoring the RBA’s/APRA’s threat of macroprudential limits on high risk mortgage lending, instead believing that measures are neither imminent nor needed:

“There’s definitely been a firming up of the regulator’s language but we still think they’re at a stage where they’re just putting out warning messages rather than likely to intervene anytime soon,” said Steven Munchenberg, CEO of Australian Bankers’ Association…

Without regulation, they are unlikely to voluntarily cut back on any part of that, let alone the juiciest portion. “The investor market is pretty attractive,” said Tony Bice, managing director at Mortgage Choice which writes about $500 million of home loans each month.

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.