PHOTO: CAMERON BURNELL/STUFF – Acting Reserve Bank governor Grant Spencer said as well as maintaining some form of LVR settings permanently, the Reserve Bank should have the ability to introduce a debt to income ratio or debt servicing instrument over the housing market.
Months after taking steps to ease lending rules, a top Reserve Bank official has warned loan to value ratios (LVRs) and other proposed restrictions could become part of the “furniture”.
Grant Spencer, who after spending most of his career in the Reserve Bank retires at the end of this month, delivered a speech on Tuesday which also called for the bank to be able to add a debt to income (DTI) or other debt servicing instrument to its toolkit.
As well as its role targeting inflation by setting interest rates, the Reserve Bank has a range of macroprudential tools it can use to help maintain financial stability.
But the rules are being reviewed as part of the review of the Reserve Bank Act, currently being undertaken by Treasury.
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READ MORE VIA STUFF