Govt moves to cool housing market
In a speech to the Auckland Chamber of Commerce today, English said that over the next few weeks, the Reserve Bank will consult on its proposals to use more tools to help ensure financial stability.
Under these proposals, the Reserve Bank will have a greater ability to influence the amount of lending done by banks and other financial institutions.
This might include requiring lenders to: Hold additional capital on their balance sheet as a buffer during an economy-wide credit boom; hold additional capital against loans in specific sectors if risks emerge in those sectors; adjust their funding ratios to use more stable sources of funding to avoid the impact of short-term funding shortages, and; restrict high loan-to-value ratio lending in the housing sector.
“They will not be the answer to all problems created by excessive credit cycles,” English said. “But they will certainly help at the margins.” English said he didn't want to “prejudge” the consultation process today.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
![[The Wrap] What the heck is happening at the FMA?](https://goodreturns.publit.io/file/c_fill,w_300,h_200/a6c3bc06-6401-44de-96e2-286c090e132d.jpg)