The head of financial stability at the Reserve Bank of Australia (RBA), Luci Ellis, has given a speech this morning to the University of New South Wales (UNSW) Real Estate Symposium 2015, whereby she outlined the RBA’s framework on financial stability and systemic risk, and played down housing market risks:
So we know that sluggish supply can create boom–bust dynamics in a property market. And we know that these asset classes are particularly amenable to leverage. Is this enough to create systemic risk to financial stability? To answer that, we can turn to a simple framework that the Bank uses to think about what might pose systemic risk…
