APRA shies away from lending restrictions but still an option

The Australian Prudential Regulation Authority says imposing lending restrictions on banks is not high on its agenda although it remains an option.

Chairman of APRA John Laker said the authority would engage directly with banks ahead of institute New Zealand style macro-prudential controls.

“We have the same tools in our armoury as other supervisors have used,” Laker told the Financial Services Institute of Australasia conference, attended by The Australian Financial Review.

“We’ve used those tools in the past and would be willing to use them, but there are a range of other actions prudential regulators can take before being forced to take macro-prudential [measures] and those tools are engaging across the table.”

His comments come after a plea from the Reserve Bank of Australia for banks to maintain lending standards and calls by the International Monetary Fund to use macro-prudential policies to restrict risky bank lending.

New Zealand recently implemented policies to ensure just 10% of total mortgages are worth 80% or more of the value of a residential property.

 

Alistair Walsh

Alistair Walsh

Deutsche Welle online reporter

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