How Many Porky Loans Do The Banks Really Hold?

For some long time, there have been questions about the quality of mortgage loans held by Australian banks. Underwriting standards require them to make appropriate inquiry before lending, but in a competitive space, sometimes corners may be cut. The obvious threat would be a rise in bad debts caused by the combination of higher interest rates and an oil shock. And it’s important to remember the lesson from the private credit mess in the United States – even the fear of defaults can cause a sharp swing in sentiment. Which then asks some important questions about the amount of risk […]