Downside risk in use of macro-prudential tools, warns RBNZ

Mon, 04 Mar 2013

By Pattrick Smellie March 4 (BusinessDesk) - Yanking the levers of the banking system to choke off a credit cycle boom requires care, since there's no guarantee how people will start borrowing again once the lever is released, the Reserve Bank of New Zealand says. "A counter-cyclical buffer would be 'released' when there were clear signs the credit cycle had peaked," the central bank says in a 12 page consultation paper laying out options for the use of so-called "macro-prudential tools" to complement the inflation-targeting primacy of monet...

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