RBA warns banks could exacerbate the housing slowdown
In a speech yesterday to mark 10 years since the begining of the global financial crisis (GFC), the Reserve Bank of Australia deputy governor Guy Debelle warned that the current Australian banking industry's habit of acting as a pack could exacerbate the housing slowdown.
"Their similar behaviour and similar reaction to events such as falling house prices run the risk of amplifying the downturn in the housing market." he said
He said that during the GFC, the countries that could keep lending flowing fared significantly better than those that did not.
"That lesson is relevant to the situation today in Australia, where there is a risk that a reduced appetite to lend will overly curtail borrowing with consequent effects for the Australian economy," he said.
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