RBA’s Bullock: Watching developments in housing market, credit very closely

The Reserve Bank of Australia Assistant Governor (Financial System) Michelle Bullock said in a scheduled speech on Wednesday.

Continually assessing whether any need for macro-prudential tightening.

Macro-pru rules should be targeted at risks arising from highly indebted borrowers.

Include tools that address serviceability of loans, amount of credit that can be obtained.

Risks to financial stability from housing could be growing.

Recent housing market strength is positive for economy.

But growth in home loans above income growth could lead to vulnerabilities.

Evidence suggests banks have maintained lending standards on mortgages.

Regulators closely monitoring lending at high debt to income ratios.

Australian banks have stronger capital position than during GFC.

Overall, rise in household debt over past 30 years is no cause for alarm.

more to come ...