jetpack domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 6131updraftplus domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 6131avia_framework domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 6131I think there is broad agreement in this list of comments
]]>Seconded.
]]>Hi Eric, I totally agree. Using LVR tools to deal with systemic risk makes sense. Although I worry about too much discretion. Its the use of a micro policy to deal with ‘wrong’ house prices that get me concerned. Especially if it then attracts political interference, which also spill over to their independent monetary policy role.
]]>2. Whatever case there was for worrying about bailout risk due to overexposure to housing seems attenuated at least somewhat by OBR; the case for LVR is lower now than it was prior to OBR, even if you expect (correctly) that OBR doesn’t entirely abolish bailout risk.
3. Even the systemic risk stuff seems to require that RBNZ has secret uncommunicable knowledge about future housing price paths. How can they know that they’re right and all the Auckland property investors are wrong? I have a hard time discounting that there’s reasonable odds that Auckland investors simply expect relative shortages to increase, so rents are lagging house prices.
4. It worries me that RBNZ folks keep talking about LVR as a way of stomping on housing prices where its better justification would hinge on systematic risk. Nolan’s on point here around comms. What price control horrors might yet come from this tack?
5. If RBNZ really really worries about systemic risk of this sort, it might be a good idea that they sponsor iPredict to run a set of Case-Shiller indices going out a few years.
I’m not a macro guy and, having been pretty wrong once about RBNZ and policy (early 2008, when I reckoned they were replaying their gung-ho 2005), I’m pretty hesitant to lay in. But this is rather more micro rather than macro. And it ain’t seeming right.
]]>Indeed – and to be fair this is why they made sure it was clear in the PTA! However, it requires a clear communication of goals within the mandate provided by the PTA, the tough thing is that financial stability is such a nebulous concept!
And the way they are starting to define financial stability is stretching this concept. Note, we could see exactly the same policy choices (in terms of LVR’s with certain restrictions) but the communication of those goals have a big impact in terms of the impact on expectations – and as a result they change the impact, and acceptability, of the policy.
]]>I think it goes broader than that. It invites political interference from across the political spectrum.
]]>http://dimpost.wordpress.com/2013/10/07/undesirable-plot/
It’s like the RBNZ is handing left-politicians a gun and begging them to shoot them.
]]>http://www.tvhe.co.nz/2009/10/30/should-the-bank-be-responsible-for-economic-structure/
http://www.tvhe.co.nz/2010/02/24/seperation-of-monetary-and-financial-stability-issues/
😉
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