By Gareth Vaughan
The Reserve Bank is effectively warning banks its 10% "speed limit" on their high loan-to-value ratio (LVR) residential mortgage lending could be dropped even lower if evidence emerges of them successfully side-stepping the policy.
The Reserve Bank also says it would be "concerned" if New Zealand banks significantly increased the funding of non-bank lending institutions' high LVR residential mortgage lending. And, the prudential regulator adds, although some foreign lending institutions have expressed interest in entering the New Zealand market in response to the LVR restrictions, none has yet done so.
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