RBNZ prepares curbs on debt service
Central bank is concerned by “very high debt” and “unsustainable house prices”
The Reserve Bank of New Zealand is considering two new macro-prudential tools, as it looks to toughen its stance on “debt serviceability”.
One option is to impose a cap on debt as a multiple of income, the central bank says in a consultation document published today (November 23). The second is impose a floor on “test interest rates” that banks use to assess borrowers’ ability to pay back loans.
“Although the financial system remains strong and banks are well-capitalised, we are concerned that
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