The banking regulator said it would hold the serviceability buffer banks use to assess new borrowers at 3pc despite a push for review from some in the market.
APRA has resisted suggestions that it loosen its lending rules to support credit growth and banking competition, insisting its 3 per cent interest rate buffer remains prudent to protect borrowers from further interest rate rises, high inflation and risks in the jobs market.
In an information paper published on Monday, APRA said: “There remain heightened risks to serviceability, including the potential for further increases in interest rates, continued high inflation and risks in the labour market. It is important that banks’ lending remains prudent at this point in the cycle.
Some analysts had suggested the serviceability buffer might be reduced to 2 per cent, to help more people get a loan. This would amount to an easing of restrictions to help borrowers prepare for a looming downturn. The speculation came after Mr Lonsdale said in January thatHowever, APRA said for now, credit growth remains solid. Total system credit growth was 8 per cent in the year to December 2022, above the post-GFC average of 5 per cent, but down from a high of 9 per cent in 2021.
“I think the comments could be characterised as APRA saying we still think there’s a lot of uncertainty out there and so to retain the integrity of our financial system we think these are the right settings,” Liberty chief executive James Boyle said on Monday. “You have two regulatory bodies working to slow the economy down, and you need them working together,” he said.APRA indicated the 3 per cent interest rate buffers, had done their job. Mr Lonsdale said he was pointed to “broadly sound” lending standards and low-loss rates, showing the strength of the banks.
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Debt-laden housing market leaves APRA little room to moveAPRA’s serviceability buffers have helped reduce some of the riskier loans in the mortgage market. But the banking regulator still sees room for caution.
Read more »
Non-bank lenders, brokers call for review of mortgage buffersNon-bank lenders that have faced a competitive onslaught from the big banks say mortgage buffers did their job, but now risk doing more harm than good.
Read more »
Debt-laden housing market leaves APRA little room to moveAPRA’s serviceability buffers have helped reduce some of the riskier loans in the mortgage market. But the banking regulator still sees room for caution.
Read more »
‘You’re not forgotten‘: how the right racialized the Ohio train disasterFox News, Trump and JD Vance claim Biden overlooked East Palestine’s plight, citing residents’ whiteness as the reason
Read more »
US agency to reverse Covid-19 policy for frequently abused prescription drugsPatients using Adderall, OxyContin and other medicines with ‘high potential for abuse’ will be required to physically visit a doctor
Read more »
Treasurer asks Australians ‘whether we can afford’ tax breaks on biggest superannuation balancesJim Chalmers defends potential change to super rules for balances over $3m as Coalition vows to oppose it
Read more »