An article on the Financial Services Institute of Australasia (Finsia) website says the “RBA seen as cautious on macro-prudential tools”:
Economists don’t expect the Reserve Bank of Australia (RBA) to emulate the Reserve Bank of New Zealand’s (RBNZ) bold approach to employing macro-prudential tools to curb lending to property investors.
The article cites:
- Westpac’s chief economist Bill Evans said the review stood out from its predecessors through its “much more strident tone.” … “My personal impression is that the bank is still reluctant to adopt more interventionist policies but is signalling in this review that more policies may be considered if investor lending does not slow.”
- JP Morgan Australia’s fixed income strategist, Sally Auld, said in the past the RBA has indicated a preference for regulations concerning amortisation or serviceability rather than the loan-to-valuation ratios that the RBNZ implemented last year
- Commonwealth Bank of Australia’s chief economist Michael Blythe said (several tools being considered) may only have a limited impact on the older, wealthier, highly-paid individuals who the RBA identified as the chief culprits in the surge in property investing. …“The path leads back to interest rates again as the most effective policy.”
