RBA Ellis:

  • APRA has been ‘turning up the dial’ on supervision
  • Need to closely eye market developments, lending standard

Headlines on Bloomberg from a speech by Luci Ellis, RBA Head of Financial Stability in Sydney

More:

  • Banks,other lenders “need to consider the risks they are taking on, not just from individual loans, but from the collective effects of lending decisions on the system as a whole”
  • APRA “will balance the advantages and disadvantages in the context of financial system stability, safety, and efficiency, and it will consider how those measures can best be targeted”
  • House prices still within same range, relative to incomes, of past decade, “albeit towards the top of that range”
  • Higher prices are incentive to spur housing construction, which is happening. “But it is worth noting that the vast bulk of that new borrowing is to purchase existing properties”

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Full text:

Future Directions in Financial Stability Analysis: Learning from Others, Learning from
the Past

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Not a lot new here, but it seems the groundwork is being laid for new tools (macroprudential) to be implemented