Serviceability restrictions as a potential macroprudential tool in New Zealand

Release date
08/06/2017

Status: The Reserve Bank has published consultation responses and its response to the consultation.

Consultation period: This consultation is closed.

23 November 2017

The Reserve Bank sought feedback about risks posed by high-DTI lending and the potential for a DTI limit or similar policy to mitigate the risks. Consultation closed on 18 August 2017.

Submissions for publication

These are responses to the consultation, received from banks, professional bodies, and individuals. Some information has been withheld from these published responses to protect privacy, or because it is confidential to the respondent.

8 June 2017

On 8 June 2017 the bank released a consultation paper and sought feedback from stakeholders on topics such as:

  • the risks posed by high-DTI lending and the potential for a DTI limit or similar policy to mitigate them
  • alternative policies under the Reserve Bank’s control and how they would compare to a DTI limit
  • desirable design features for any DTI policy and the potential costs and benefits

The consultation paper outlined the Reserve Bank’s view on these issues. The Reserve Bank has said it would not implement a DTI policy in current market conditions, but that it considers it could be a useful option in the future. The consultation paper included a cost-benefit analysis considering the potential  costs and benefits of implementing a DTI policy and finds there could be significant net benefits.