The Reserve Bank has undertaken a detailed.....>

RBNZ: The Reserve Bank has undertaken a detailed evaluation of Loan-to-Value

Ratio restrictions (LVR) as part of a wider review of macroprudential policy.

"By improving the resilience of both households and banks, LVR policy has played

a useful role in promoting financial stability during a period of heightened

housing market risks," Deputy Governor and Head of Financial Stability Geoff

Bascand said. "This work is timely. Macroprudential was established as a new

policy function in 2013, and based on the experience of the past five years

we've updated our strategy for using the tools," Mr Bascand said.

"Macroprudential policy is not about eliminating risks for banks and households,

reducing house prices, or managing the business cycle. Affordability pressures

on the housing market and the rental market require a much broader policy

response," Mr Bascand said. He said that other macroprudential policy measures

could also be used to build additional capital and liquidity buffers in the

banking system, so that banks could support the economy under stress.