Regulator in high alert mode over lending practices
(24 March 2006 – Australia) Australian Prudential Regulation Authority chairman John Laker has fired a warning shot across the bows of institutions whose credit quality the regulator says is deteriorating.
Laker was responding to an environment which has seen high levels of competition drive banks and other financial services companies to streamline their lending processes, and offer more relaxed lending products, particularly in the residential mortgage markets.
Laker said APRA had placed six Australian financial institutions it believed was at risk of having customers default, on "high alert".
In all, 13 institutions are on a high alert list, and Laker said they could expect to have the regulator "on their doorstep".
"Neither I nor the governor of the Reserve Bank have made any secret of our concerns about slippages in credit standards in residential mortgage lending," Laker said.
Laker said APRA had placed six Australian financial institutions it believed was at risk of having customers default, on "high alert".
In all, 13 institutions are on a high alert list, and Laker said they could expect to have the regulator "on their doorstep".
"Neither I nor the governor of the Reserve Bank have made any secret of our concerns about slippages in credit standards in residential mortgage lending," Laker said.
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