Just last week, Reserve Bank of Australia (RBA) governor Philip Lowe stated that lending standards remain sound but warned that they must continue to remain so given historically low interest rates and the recent surge in house prices.
The Council of Financial Regulators (CFR), which is the coordinating body for Australia’s main financial regulatory agencies and comprises APRA, ASIC, RBA and Treasury, then followed up with a statement that it will continue to scrutinise lenders and will be prepared to intervene if lending standards deteriorate and financial risks increase:
The Council places a high emphasis on lending standards remaining sound, particularly in an environment of rising housing prices and low interest rates. It will continue to closely monitor developments and consider possible responses should lending standards deteriorate and financial risks increase.
