Reserve Bank of Australia Governor Philip Lowe spoke dueirng the Sydney evening
Mike had the headlines (and I'm gonna highlight this ... for my money the key point Lowe has been hammering is this in Mike's list): regulators concerned about risks to the future health of Australian economy from indebtedness
In his role as head of the RBA Lowe is not fussed if people are paying up for houses, except when runaway prices (and loose lending criteria) pose risks to financial stability and the health of the economy. Hence his concern (which he has expressed before, not just in his comments overnight), which he reemphasised.
(Lowe first publicly floated these concerns in February:
- Does see risk that encouraging more borrowing would lead to consumer downturn
Households coping reasonably well with high debt, but is affecting spending - and later from the same day, more)
There are a number of reports in media on Lowe's speech overnight if you want more, this from Bloomberg for example:
- Australia's central bank Governor Philip Lowe rebuked the nation's banks over lax lending practices and warned regulators are prepared to consider further prudential measures to steps announced last week.
- "Too many loans are still made where the borrower has the skinniest of income buffers"
- The RBA chief also signaled that government should do more: law makers have failed to release land, encourage residential development and build transport infrastructure in a way that would have allowed Sydney and Melbourne to absorb their rapidly expanding populations without triggering runaway prices.
(A note on this last point, "government should do more" ... to all these suggestions Lowe also added comments on tax policy. NONE of these are anything the Reserve Bank of Australia can do anything about, they are mere helpful suggestions from Lowe and are echoed by many, many Australian policy commentators.)
And plenty more:
- Australian Financial Review (may be gated): RBA's Lowe takes aim at desperado borrowers
- News dot com: The Reserve Bank of Australia has fired a stern warning at mortgage lenders, knowing any change to interest rates is a risk to fragile economic growth.... RBA governor Philip Lowe is concerned soaring housing prices are pushing up the household debt to income ratio - which he said was already at a record high earlier this year.
And, if you'd prefer the horses mouth: Remarks by Philip Lowe, Governor, at Reserve Bank Board Dinner, Melbourne
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