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RBA financial stability report: Steps up talk on macro-prudential measures

FXStreet (Bali) - On its semi-annual financial stability report, the RBA said that additional measures might be considered to cool down housing prices and limit banks# lending practices.

As Reuters reports: "In a 64-page Financial Stability Review report, the RBA said the crucial question for macroeconomic and financial stability is whether lending practices are conservative enough for the current combination of low interest rates, strong house price growth and higher household indebtedness."

Key headlines (via Reuters)

Discussing with Apra further steps to strengthen bank lending standards

Apra has already intensified supervision of mortgage lending

Composition of housing and mortgage market becoming "unbalanced"

Bank competition driving strong rise in loans for housing investment

Speculative demand could amplify house price cycle, risk eventual sharp reversal

Risks from housing cycle mostly macroeconomic, could become systemic if loan growth persists

Important that australian banks do not loosen mortgage lending standards

Overall lending standards have not eased as yet, but still might not be conservative enough

Strong investor demand for commercial property driving up prices, but risks modest so far

Australian bank profitability remains robust, capital ratios rising and bad debts falling

Shadow banking only small fraction of australian market, poses little systemic risk

Indicators point to low levels of financial stress in household sector

Business lending by foreign-owned banks in australia expanding at a fast pace

Rising concerns about asset quality in china amid slower growth, softer house prices

Japan Nomura/ JMMA Manufacturing Purchasing Manager Index came in at 51.7, below expectations (52.5) in September

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