DeBell, Deputy Governor of the Reserve Bank of Australia (Photo)
DeBell (Guy Debelle), deputy president of the Reserve Bank of Australia`s (RBA), warned that heavy debt and potential mortgage payments by Australian households remained a major risk to Australia`s economic development.
DeBell, deputy governor of the Reserve Bank of Australia, issued another warning in a speech this morning about the huge mortgage debt on Australian families, the Australian newspaper reported. However, DeBell also said that while the Australian economy is slowly rising, but in the short term is unlikely to raise official interest rates.
DeBell said heavily indebted residents could drag down economic activity. If lending rates rise, if lenders face higher repayment costs, and if lenders tighten lending standards sharply under the influence of the bank`s royal commission of inquiry, there will be turmoil in the housing market.
The Reserve Bank of Australia had earlier warned that its indulgence in interest-only loans would have serious consequences over the next three years. As hundreds of billions of interest-only loans are converted into ordinary loans, lenders rush to refinance or sell homes.
