Banks not happy with RBNZ DTI tool

The proposed inclusion of a debt-to-income (DTI) ratio tool in the Reserve Bank's toolkit was largely met with criticism in a series of submissions, with ANZ New Zealand saying it is fundamentally flawed and Cooperative Bank calling it a blunt, unproven instrument, BusinessDesk reports.

The central bank initially sought to include serviceability restrictions or a DTI tool as part of a macroprudential toolkit that includes restrictions on high loan-to-value ratio (LVR) lending aimed at curbing an overheated housing market.

The proposed inclusion of a debt-to-income (DTI) ratio tool in the Reserve Bank’s toolkit was largely met with criticism in a series of submissions, with ANZ New Zealand saying it is fundamentally flawed and Cooperative Bank calling it a blunt, unproven instrument, BusinessDesk reports.

The central bank initially sought to include serviceability restrictions or a DTI tool as part of a macroprudential toolkit that includes restrictions on high loan-to-value ratio (LVR) lending aimed at curbing an overheated housing market.

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