A stable, well-functioning financial market for allA stable, well-functioning financial market for allFI welcomes inquiry into macroprudential policy
FI has taken several measures since 2010 to reduce the risks associated with households’ high levels of debt. These measures include the amortisation requirements and the mortgage cap. FI welcomes the Government’s announcement today presenting an inquiry to look more closely at how these measures have functioned.
FI's evaluations show that the measures have resulted in new mortgagors borrowing less and buying more inexpensive homes than they otherwise would have done. In particular, the percentage of new mortgagors taking large loans in relation to their income or the value of their home has slowed. This has also slowed the increase in housing prices.
Overall, FI makes the assessment that the measures have strengthened households' resilience and increased stability in the financial system.
FI has also shown that implemented measures limit some households' possibilities for loaning and saving and that these negative side-effects need to be weighed against the benefits. Therefore, FI welcomes the Government's appointment of an inquiry to investigate how the measures have functioned.
