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Economist's radical plan to cut bubble lending

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Australian Broker | 09 Jan 2017, 08:00 AM Agree 0
As well as using cash injections to cut down existing debt, banks would also limit the amount of lending given to borrowers
  • DC | 09 Jan 2017, 09:25 AM Agree 0
    Mr Keen is obviously a very well educated man, given the positions he holds in the Academic world. Unfortunately, I think he wears slip on shoes as he has no practical ability to tie his own shoe laces. He makes broad sweeping statements about how banks should lend. The trouble is not in the harshly governed and monitored mortgage area, it is in the unsecured credit area. Time and again, we will have clients cancel or reduce credit card limits to enable them to borrow for a house. A few years later, they are wanting to consolidate new debt into their mortgage. They have been offered credit, quite often by the same bank who made them reduce their limit to qualify for the home loan, from all and sundry, many who I think just figure the person qualifies as they "own" a house. Stop focusing on the secured mortgage lending and start looking into the world of credit cards, "60 month's interest free" lending and the like. Oh, and Mr Keen better get his walking shoes ready (velcro straps?) when his latest predictions prove as accurate as his previous ones.
  • Joe Siragusa | 09 Jan 2017, 12:49 PM Agree 0
    Put a time limit on negative gearing. Negative gearing allowances reduce by say 10% per annum forcing property investors to restructure their investment loans to be positively geared therefore contributing to the National tax income rather than being on the tax deduction teat for ever.
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