As UT said, that is a completely different scenario.
As for the HC pro bank lobby. LOL
I am not pro bank, far from it. But I am pro choice, pro responsibility and pro free market.
What you are effectively proposing is that banks should have had higher lending standards than the regulators require.
Which;
A) means higher deposits and therefore harder for first home buyers to get a loan
B) higher interest rates for all that means banks profit more
C) less investors to encourage development of more housing
It is simply not possible to make a blanket statement that the banks are responsible for the current housing boom in Sydney/Melbourne. The people that buy the houses are. Simple. End of story. No buyers, no boom.
If those people or their guarantors lose money that is their own fault and they are responsible for their own actions.
It is their choice to take out a loan at market rate.
