Hot on the release of the Murray report, the Australian banking regulator (APRA) and the Australian investment and security regulator (ASIC) has today exposed teeth as they start growling and barking at our reckless banks.
Both regulators have launched an attack on prevalent risky residential mortgage lending practices, targeting in particular, loans to the overheated investor market.
According to reports, APRA has written to the banks today, telling them growth in loans to property investors should not exceed 10 per cent. APRA warns it stands ready to raise capital requirements early next year if banks do not take a more prudent approach to mortgage lending.
ASIC has today announced surveillance operations into interest only loans. In the September quarter, more risky interest-only loans reached a record high of 42.5 per cent of all loans issued. More property investors than ever before are betting prices will only go up, raising alarm bells among regulators.
» APRA launches crackdown on loans to property investors – The Age, 9th December 2014.
» Financial regulators united in attack on risky loans – The Sydney Morning Herald, 9th December 2014.
» APRA, ASIC increase surveillance of risky home lending – The ABC, 9th December 2014.