Westpac calls for RBA breather on rates

While endorsing yesterday’s rise in official interest rates, Westpac managing director David Morgan cautioned the Reserve Bank of Australia against lifting rates again soon. “It’s time to take a small breather. We do have a more highly geared household sector than in any time in history… Given that gearing [there is] a case for taking a bit of a breather.” Asked to comment on his meeting with the federal treasurer, Peter Costello, last week Morgan said, “I was able to assure him that as far as Westpac was concerned we were absolutely confident on that score. Our lending quality is very prudent and all forward indicators of credit quality are fine. That is not to say there is not some inappropriate lending going on in this economy. There is. But for the most part you can trace it back to the non regulated and non conforming sector. As to the pockets of ugliness, we have worked through and are still working through the adjustment to the housing boom. To a major extent it’s an orderly process.”