RBNZ decides not to ease LVR restrictions
The Reserve Bank has decided not to ease loan-to-value ratio restrictions as many had expected because very low interest rates could fuel excessive risk-taking. The regulator has also warned insurers to improve their capital reserves and noted a spike in overdue dairy loans. Bernard Hickey reports.
Governor Adrian Orr has warned in the regulator's half-yearly report on financial stability that prolonged low interest rates can promote excessive risk-taking and debt and overheat ass