APRA chairman Wayne Byres recently elaborated on the consequences for banks that exceed the 10 per cent annual growth benchmark for investor lending.

At the A50 Australian Economic Forum in Sydney last week, Mr Byres said that APRA has been keeping a close eye on mortgage lending, particularly the quality of new lending.

“We have lifted our supervisory intensity in a number of ways – collecting more data from lenders, putting the matter on the agenda of boards, establishing stronger lending standards that will serve to mitigate some of the risks from the current environment, and seeking in particular to moderate the rapid growth in lending to investors,” he said.

“These efforts are often tagged ‘macro prudential’, but in an environment of historically low interest rates, high household debt, relatively subdued wage growth, and strong competitive pressures, we see our role – in simple terms, seeking to make sure lenders continue to make sound loans to borrowers who can afford to pay them back — as really pretty basic bank supervision.”

Mr Byres said APRA’s recent efforts have generated a moderation in investor lending, which he noted was accelerating at double digit rates of growth but has now come back into single figures.


Source The Advisor