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RBA Financial Stability Report: Lending standards tighter

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 16, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Bali) - RBA Financial Stability Report notes that indicators of financial stress remain fairly benign, and that lending standards have been tighter this year.

    Headlines via Reuters

    Risks around housing and mortgage markets seem higher than average

    Bank lending standards were weaker than first seemed, have now been tightened

    Says lending risks appear to be "comfortably manageable" at this stage

    But regulators seeking a "permanently stronger" level of bank lending standards

    Risks growing in commercial property sector due to investor demand
    Sees risk of downturn in Melbourne, Brisbane apartment markets due to oversupply

    Tentative signs that sentiment is turning in Sydney, Melbourne housing markets

    Possible some banks may have to slow their home lending yet further

    Some investors might be under-pricing liquidity risk.

    With the US Federal Reserve's first tightening since 2006 in prospect, the risk is that this combination of factors could trigger a sharp repricing in markets

    Indicators of household financial stress remain fairly benign

    Key challenge will be to keep lending standards tight given environment of low rates

    Household and banking sectors are becoming better placed to manage the risk environment than they were a year or so ago
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