From Barclays economist Kieran Davies, on the October monetary policy board meeting minutes (released earlier today):

  • The RBA board appears to have discussed macroprudential tools at the meeting
  • No disclosure in the minutes, though
  • Davies is of the opinion that the RBA may introduce a new ‘macrop-prudential’ measure before the end of 2014
  • Davies thinks the bank may implement a capital charge for investor home loans
  • For example, Davies estimates that a doubling in the risk weighting for investor home loan would equate to half a 25bp rate rise for the housing market
  • Such a tool would be a “clear risk to the timing of our forecast that modest rate hikes commence in Q1 next year”