RBA Macfarlane’s warning part of a concerted campaign

For the Reserve Bank governor to go public with a warning about bank’s lending practices in the home loan sector, it suggests that private warnings to the banks have gone unheeded. Columnist Alan Wood concludes that Ian Macfarlane's speech is part of a concerted campaign by Australia's financial regulators to force the banks to rein in their increasingly risky loans. The Reserve Bank fired one warning shot in its Financial Stability Review last month, but it passed largely without remark. Then last week John Laker, a former central banker and now chairman of the Australian Prudential Regulation Authority, followed with a much sharper warning.

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