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A major lender has hit back at claims from the Australian Prudential Regulation Authority (APRA) and the Reserve Bank of Australia (RBA) that loosened credit standards will damage the economy.
A major lender has hit back at claims from APRA and the RBA that loosened credit standards will damage the economy.
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Speaking at NABs full-year profit media conference, CEO Cameron Clyne denied that relaxed lending standards would affect the broader economy.
“In terms of a relax in credit standards it is more so apparent in the business space than residential,” Mr Clyne said.
“However I don’t think it’s much of a threat to the economy at all.
“I think that the reality is that there are some isolated examples, but fundamentally these are always around the margins. We have four resilient banks and obviously a number of other participants in the market.”
Mr Clyne’s claims follow a series of warning from both the Reserve Bank and APRA who warned banks to not loosen lending standards.
“We’re just reflecting the fact that we’ve seen an increased appetite and perhaps looser credit standards than we’ve seen in the past and that’s allowed us to improve the risk profile of our book,” Mr Clyne said.
The news comes just a day before the head of credit strategy at Citi Matt King told The Australian Financial Review that a housing bubble was imminent.
“There is a mixture of [central banks] consciously persuading themselves that there is not a problem in so far as it is always difficult to tell in a bubble that there is a problem,” he told the AFR.
“What the global central banks seem to be doing is saying, ‘We are struggling to generate growth; I know, let’s create a new house price bubble – that worked last time around, maybe it will this time around too’.”
