The prudential regulator has cited the likelihood of the Reserve Bank continuing to raise interest rates – and risks from high household debt – as two reasons why it will not loosen lending rules, rebuffing suggestions from some lenders to make it easier for them to write loans.

Amid intense competition from the major banks, forcing the Commonwealth Bank to disclose it was writing some loans at a loss, new figures from the Australian Prudential Regulation Authority showed credit growth at close to recent highs, up eight per cent in the year to December 31.