Arrears/performance/credit quality. (255 items)

Risks to financial stability "are primarily macroeconomic in nature, rather than direct risks to the stability of financial institutions", the Reserve Bank of Australia declares in its Financial Stability Review, released on Thursday.The April 2017 edition of this half-yearly report shares public domain versions of analysis no doubt considered this year among the Council of Financial Regulators, culminating in APRA's outline of additional macroprudential measures at the end of March.Around one-third of borrowers have either no accrued buffer or a buffer of less than one month's repayments, the RBA said. read more

APRA's new curbs on mortgage lending drew muted support yesterday from one section of the target market for the measure - the ratings agency Moody's Investors Service. read more

Improved clearance rates over the weekend point to business as usual in the property market.It's one reason APRA's latest turn of the vice on banks' loans to property investors is "unlikely to substantially slow the increases in dwelling values, particularly in Sydney and Melbourne," Cameron Kusher, head of research at CoreLogic believes.?Rather, investment fundamentals may, over time, leave their mark on the frothy property prices of Australia's two largest cities, the chief commentator for the influential research house believes. APRA's activism, in Kusher's view, only extends the list of factors at play."From an investor's rationale, surely the proposition for investment, particularly in Sydney and Melbourne is starting to weaken," Kusher wrote in a blog post yesterday."Housing markets are likely approaching their peak," he said. read more

A socio-economic analysis of the users and abusers of the tax break that is negative gearing on residential investment property casts a doubtful spotlight on the effect APRA's tightening of the vice on interest-only loans may have on a sector pursued with gusto by many lenders.The affluence and wealth of the bulk of investment property borrowers will leave sceptics wondering how much bank caution toward this critical customer segment will dampen credit demand. read more

The iconoclastic take on home loan concentration risks in banking is now the orthodoxy. A switch in thinking outlined by APRA chair Wayne Byres yesterday defines the outlines of a future crisis that financial regulators are now racing to deflect. read more

More activism is probable on lending standards, RBA governor Philip Lowe told a Melbourne dinner last night. Taking on a public relations job so far side-stepped since APRA tightened its banking vice last week, Lowe put worries over Australian banking sector stability and resilience in context."These prudential measures help lessen the amplification of the cycle we get from borrowing and reduce the risk of developments on the financial side weakening the resilience that our economy has exhibited for many years," he said. "Ideally, this would be achieved by financial institutions acting themselves, without the need for prudential guidance. But sometimes prudential guidance can help the whole system adjust." read more

Australian Military Bank is a rare ADI with growth in loans for investment property purposes that exceeds APRA's ten per cent cap, a rule that has been in place now for around a year.John Ford, chief executive of Australian Military Bank, confirmed the breach, and plans for its mitigation, to Banking Day. read more

Eight lenders, including three major banks and a couple of names rarely pinged by ASIC, may not even be guilty of the shortcomings alleged. read more

Pepper, Liberty, La Trobe, FirstMac, Resimac, AFG Home Loans, RedZed - the whole spread of non-banks –  are all APRA regulated now, at least when it comes to macroprudential policy and the use of more handbrakes on questionable residential lending.One vital, if final, detail in a long list of measures set out by the Australian Prudential Regulation Authority on Friday is directed at making a gutsy and vibrant non-bank mortgage funding sector conform to restraints equivalent to those imposed on authorised deposit-taking institutions.ADIs funding "warehouses" (licks of wholesale lending to non-banks to sustain new business) must "ensure that the lenders' mortgage lending standards are consistent with industry-wide sound practices," APRA decreed on Friday. read more

Weeks of guesswork ended on Friday, with APRA dictating a long list of new macroprudential policy measures.The professional worrywarts at the Australian Prudential Regulation Authority did not mess around in stating their rationale, citing "the resilience of lenders, as well as on the household sector more broadly."APRA's worries are decidedly too-faced, with its chief Wayne Byres writing of the imperative of assuring the credit flow for "the increasing supply of newly completed construction which must be absorbed in the year ahead." APRA's other aims all pull the other way, choking growth in credit supply by demanding ever more sober assessment by lenders. read more

There is more to the housing market in Australia than just Sydney and Melbourne, and action in regional markets will keep today's figures in shape for 2017 – expect more regulation, says a new Deloitte report. read more