APRA cites more rate rises for reluctance to change lending rules

James Eyers and Ayesha de Kretser

Updated Feb 27, 2023 – 3.33pm, first published at 10.43am

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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.

James Eyers writes on banking, payments and fintech. He is a former legal and investment banking editor at the AFR, has degrees in commerce and law from UNSW, and is co-author of Buy now, pay later: The extraordinary story of Afterpay

Ayesha de Kretser is a senior reporter with The Australian Financial Review covering the aviation and tourism sectors. She has previously reported on banking, mining and commodity markets.