By guest contributor Ken Atchison, CEO, Atchison Consultants
APRA is restraining the growth of business activity in Australia through credit restraint. The latest set of data released as at July 2019 shows Australian private credit to be growing at a very slow rate.
Chart 1: Credit Growth
Slow lending growth is a consequence of APRA policy in recent years. The implementation of counter-cyclical capital buffers for Authorised Deposit-taking Institutions (ADIs), mainly banks, have been initiated by APRA. “…ADI capital levels have continued to move towards the unquestionably strong capital benchmarks APRA outlined in 2017.”1 These controls are intended to provide sufficient loss-absorbing capacity in ADIs in stressful circumstances.