RBA mistakes speculation for “risk taking”

by Chris Becker

The RBA’s Assistant Governor Malcolm Edey had some interesting comments the FINSIA Conference in Sydney this morning. From Forex-live:

RBA Edey: Seeing some concentration of risk-taking in economy, particularly in housing:

• Seeing some concentration of risk-taking in economy
• Risk-taking concentrated particularly in housing

The RBA is confusing risk-taking and speculation. The latter has been rampant:

The former terrible:

With a little “risk-management” this could have been avoided. Now the bank has two problems. Not enough risk-taking and way too much speculation.