"If banks increased their deposit requirements we could lower...

  1. 1,366 Posts.
    "If banks increased their deposit requirements we could lower rates and there would be no housing bubble. Alternatively we could curb negative gearing. "


    Key word = If.

    According to this piece below non big 4 lenders have relaxed requirments to capitalise on a "growing" sub prime sector. What happens when rates are lowered in an environment where banks have been relaxing prudent lending as part of the initial GFC response?

    http://www.theaustralian.com.au/news/nation/low-doc-risks-rise-in-loans-scramble/story-e6frg6nf-1226481371845

 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.