The banks are whinging about having to increase capital levels, threatened to pass on these "liabilities"to customers (increased interest rates for loans, stuff all interest rates for depositors as is the case now). Why did APRA demand this of the banks? Obvious, the banks would have lent more and more for more profits..... not considering the potential collapse of the rel estate market leading potentially to their own demise.
Since 2009, banks can only lend 95% (without a guarantor).... now there are moves to bring deposits back to more realistic levels... the problem is that house prices are so high, relative to wages, first home buyers are really finding it difficult to get into the market.
The banks have had their part in elevating house prices. It is one thing to teach financial literacy to the average Joes, especially harder for younger who are likely to take more risks. The givers of loans should have been more responsible as they have many years of experience.. current bank executives would remember the 19-20% interest rates of the late 1980's, early 1990's.
Admittedly, Australian banks followed suit competing with other overseas banks.... amusing to think that Australian Banks capital levels, according to the FSI, were in the top quartile of banks.... shows how dodgy the whole banking system has become globally. Australian banks are reliant on overseas capital, so they are exposed in that area as well.... capital levels??
The banks have no excuses really. Who will lose everything if there is a dramatic downturn in real estate prices? The talk of bail ins (bonds for deposit monies etc) has been mentioned to rescue the banks.... last decade (decade and a half), but more recent buyers will get mauled, they will get no sympathy or rescue.
Buyer beware is one thing, but the little people will pay for the bankers' irresponsibility.
