The prudential regulator will not relieve borrowers of the 3 per cent interest rate buffer they must absorb before qualifying for a home loan because the economy faces too much uncertainty from inflation, geopolitics and leverage.
As Commonwealth Bank shares claimed a fresh record of $134.90 on Monday, Australian Prudential Regulation Authority chairman John Lonsdale said he was concerned risk in the financial system “remained elevated”, in a letter to lenders following a quarterly review of financial stability.
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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 Connect with James on Twitter. Email James at jeyers@afr.com.au
Jonathan Shapiro writes about banking and finance, specialising in hedge funds, corporate debt, private equity and investment banking. He is based in Sydney. Connect with Jonathan on Twitter. Email Jonathan at jonathan.shapiro@afr.com
