Search Results for: probability of default

Bank of England Consults On Tighter Lending Standards For Buy-To-Let

The Bank of England has released a consultation paper which seeks views on a supervisory statement which sets out the Prudential Regulation Authority’s (PRA’s) proposals regarding its expectations of minimum standards that firms should meet when underwriting buy-to-let mortgage contracts. The proposals also include clarification regarding application of the small and medium enterprises (SME) supporting … Continue reading “Bank of England Consults On Tighter Lending Standards For Buy-To-Let”

New Investor Mortgage LVR’s Being Trimmed

The peak LVR’s on investment mortgage transactions is down according to a speech today given by Heidi Richards, General Manager, Industry Analysis APRA, which developed further the information published yesterday relating to mortgage underwriting standards. This is important because 62% of bank lending is mortgage related (a high). Whilst much of the information in the … Continue reading “New Investor Mortgage LVR’s Being Trimmed”

How Sensitive Are Owner Occupied Mortgage Holders To Rising Interest Rates

Continuing our analysis of the impact of rate rises on mortgage holders, today we turn from investors (where we showed that a considerable proportion would be in difficulty if rates rose even a little), to look at owner occupied borrowers. For this snapshot we are only looking at households loans for occupation, so exclude investment … Continue reading “How Sensitive Are Owner Occupied Mortgage Holders To Rising Interest Rates”

Lending to tighten as banks look to avoid mortgage risk

From Mortgage Professional Australia. Lending to tighten as banks look to avoid mortgage risk​ Specific postcodes or suburbs won’t be denied home loans, but one financial analyst believes Australia’s big banks are moving to a path of more restrictive lending. Martin North, the principal of Digital Finance Analytics, believes major lenders will soon be introducing … Continue reading “Lending to tighten as banks look to avoid mortgage risk”

Property Markets and Financial Stability: What We Know So Far

Interesting perspectives from Luci Ellis, Head of Financial Stability Department, RBS speaking at the University of New South Wales (UNSW) Real Estate Symposium 2015. She correctly highlights that the property market is not a single amorphous whole, and that a wide range of interconnected drivers are linked. However, one important point which though mentioned, is … Continue reading “Property Markets and Financial Stability: What We Know So Far”

Investment Property Loans ARE More Risky – Fitch

Fitch Ratings says that the investment loan reclassification process announced by National Australia Bank Limited will not result in a withdrawal or downgrade of Fitch’s ratings on the National RMBS Trust notes and outstanding issuance under NAB’s mortgage covered bond programme. The reclassification process has been initiated following a review of NAB’s housing loan purpose … Continue reading “Investment Property Loans ARE More Risky – Fitch”

Mortgage Stressed Household Count In Sydney

Continuing our analysis of mortgage stress (one of the drivers of our estimation of the probability of default), we have estimated the actual number of households in each post code who are experiencing stress currently. To recap, Mortgage stress is a poorly defined term. The RBA tends to equate stress with defaults (which remain at … Continue reading “Mortgage Stressed Household Count In Sydney”

Restoring Trust in Basel IRB Models Will Take Time – Fitch

Greater comparability in capital requirements across EU banks is likely to take time, Fitch Ratings says. Meanwhile, doubts surrounding internal ratings-based (IRB) models are likely to continue to undermine trust in regulatory capital ratios. The European Banking Authority’s (EBA) consultation on the future of the IRB approach, which closed last month, included proposals for detailed … Continue reading “Restoring Trust in Basel IRB Models Will Take Time – Fitch”

NZ Reserve Bank Consulting On Property Investor Loans

The Reserve Bank of New Zealand is consulting on a new asset class treatment for mortgage loans to residential property investors within its capital adequacy requirements. They propose to separate investment and owner occupied loans from a capital perspective, (once loan types are defined), and apply different capital treatments, requiring more capital for investment loans, … Continue reading “NZ Reserve Bank Consulting On Property Investor Loans”

The Post-Crisis Bank Capital Framework

David Rule, Executive Director, Prudential Policy at the Bank of England gave a good summary of the current issues surrounding capital, and commented specifically on issues surrounding internal (advanced) methods. Six and half years after the depths of the Great Financial Crisis, we know the shape of the future global bank capital framework. But important … Continue reading “The Post-Crisis Bank Capital Framework”