RT @Adherium: We are excited to announce that the U.S. Food and Drug Administration (FDA) has granted our 510(k) clearance for over-the-cou…
3/04/2018 1:56 PM
The Economist | Moral hazard https://t.co/GU02RCk5VA via @TheEconomist
28/02/2018 7:09 AM
RT @ftcompanies: Corporate moves to cut ties with NRA do not go far enough https://t.co/CjwL5x8NhS
26/02/2018 8:14 AM
RT @KateRaworth: Let's get personal. Here's my life - along with my mum's, my kids and their kids - mapped out on a climate timeline. Bring…
26/02/2018 8:13 AM
RT @natehoIe: Companies that cut ties w/ the NRA: Delta United Airlines SimpliSafe Teladoc Wyndham Hotels MetLife Symantec Enterprise Alam…
25/02/2018 6:56 PM
RT @bernardchickey: Real question for RBNZ is why isn't it cutting rates? Core inflation below 2% target for 6 years. Jobs growing strongly…
9/02/2018 8:34 AM
RT @MkBlyth: Thought for the day: Let's say rising wages cause inflation panic cause equity crash. So we have built a system where stabilit…
9/02/2018 8:23 AM
RT @MkBlyth: Oic of the day. HT to @DougHenwood for nailing this. Not only is a 2.4% annual growth in wages unlikely to start an inflationa…
9/02/2018 8:22 AM
RT @Adherium: CEO @arik_anderson featured in @beckershr - Rule No. 1 for medical technology: Stay out of the doctor’s way https://t.co/d5FP…
1/02/2018 5:10 PM
RT @MkBlyth: Picture of the day from Llewellyn Consulting. Gross World Product went from 18 to 77 trillion since 1980. Massive Growth. Wher…
1/02/2018 5:10 PM
Recent Post Comments
I am sorry but this comment section has been disabled due to spam. My contact details are easy to find, please contact me if you want to comment or discuss anything on this blog.

Print-friendly
21
NOV 13

Loan to Value Ratios




There was a recent article in Bloomberg, which talked about RBNZ’s recent moves to protect financial stability, particularly in comparison to the Federal Reserve.

New Zealand was not the first to expand the use of prudential controls to blunt debt growth. It is inevitable that targeted interventions create reactions from the targeted rather than spreading the pain around by an interest rate hike, and who cares about a few exporters suffering with higher exchange rates.

The word is the LVR restrictions are being effective, perhaps too effective in areas that are no contributing to the asset price bubble. Collateral damage needs to be avoided or we run the risk of the antibodies triggered by the prudential restrictions impacting good policy – the policy bombs need to be smart.

LVR restrictions in the regions and for new builds make no real sense and should be seeing some policy attention.
 


tags: loan to value ratios, prudential tools, policy, interest rates, exchange rates
I am sorry but this comment section has been disabled due to spam. My contact details are easy to find, please contact me if you want to comment or discuss anything on this blog.