Deadline for submissions is on Dec. 14
The Reserve Bank of New Zealand is seeking feedback on the technical design aspects of the regulatory framework for debt-to-income (DTI) restrictions.
“Rules on these design matters need to be agreed [upon] before banks can begin making the systems changes required to be prepared to implement DTI restrictions,” RBNZ said. “These changes will take banks around 12 months. We have not made a decision to activate DTI restrictions and are not consulting on a particular DTI setting at this stage.”
The move follows a consultation launched in November 2021, which found that DTI restrictions were likely to be more effective than test rate floors in supporting financial stability and sustainable house prices and have less of an impact on access to credit for first-home buyers. In April 2022, the central bank announced that it would proceed with getting this tool operationally ready.
Stakeholders have until Dec. 14 to submit their views on the questions set out in the consultation paper.
