In his recent speech “Trust and Prosperity” RBA Governor Philip Lowe said that banks were being too tight with their lending policy due to the fear of reprisal from regulators from the Royal Commission. The banking system has gone from a system of weak regulation to something that is overly stringent and keeping good customers out of the market.

He noted that the behaviour of the banks that has been highlighted by the royal commission has created distrust between consumers and the banks that will take a long time to get over.

However, the head of APRA suggested that consumers need to also take some responsibility for the loans they take on. “Buyer beware” still needs to be a part of the system. Programs like the ridiculous 60 minutes program that was aired recently that tried to remove the customer’s responsibility for taking up bad investments and arguing that the responsibility should be back onto the banks is absurd and does not help the cause. This just makes it more difficult for other people trying to get loans.