RBA's Bullock crossing the wires

Michele Bullock who is the Assistant Governor Financial System is currently speaking at the Responsible Lending and Borrowing Summit in Sydney.

• RBA's Bullock: Banking system is strong and well capitalised, supported by prudent lending standards.
• RBA's Bullock: Mortgage stress still low in Australia.
• RBA's Bullock: The historically high levels of mortgage debt in Australia raises questions about the resilience of household balance sheets to a change in circumstances and the ability of the financial system to absorb a widespread increase in household financial stress. 
• RBA's Bullock: The information we have suggests that, while there are some pockets of financial stress, the overall level of stress among mortgaged households remains relatively low".
• RBA's Bullock: Bullock notes a large proportion of interest-only loans are due to expire between 2018 and 2022 Among such borrowers, she said, there may be some who "do not meet current lending standards for extending their interest-only repayments but would find the step-up to principal and interest repayments difficult to manage."