The Reserve Bank has an odd mandate.
On one hand they directly involved themselves in cocking up the economy to the extent it has been by throwing printed money about the place, often with no real guidelines to banks as to where it would end up. Small clue: it went into housing.
But the on the other hand they are all over us in terms of rules around what we can and can't do with income to debt ratios, how much money a bank has to hold in reserve for troubled times, etc.
The latest is the directive to banks about insurance cover on the places they lend money on, i.e. when we get a mortgage, we need cover and they now expect the banks to be even more vigilant about the sort of cover, how much for and how long it will last.
It's all in their Financial Stability Report.
But on the insurance issue they revert to their hands off approach, where they point out that they are seeing more people having trouble getting and paying for insurance and that this will be a growing issue.
Thanks for the warning. Have you got any advice?
Well, they have, sort of. They recommend insurers, Governments and home buyers, as well as lenders, should take action to improve our understanding of natural hazards and to proactively manage affordability challenges.
Awesome. Thanks for that.
This in some respects is the issue of our time. Like it or not insurance, if it hasn’t already, will become a burden, if not a nightmare.
The Government has already moved on the earthquake rules around buildings, knowing full well the current deadlines are unrealistic.
But the day is coming, if it isn't already here, where people cannot afford to be where they are or want to be, or even if they have money, can't find a backer.
So, the big question the Reserve Bank doesn’t answer is - then what?
If you can't get insurance, you can't get a mortgage. Maybe you can't get a mortgage because you can't afford insurance to the level they now expect.
You are stuck in a place that was once safe and now isn't. What do you do?
This all has enormous economic and social consequences. So, who is in charge of this and what is the plan?
Telling us it's an issue in a stability report isn't really a solution and that’s probably the way they like it.
It's always easier to point a problem out than to actually deal to it.
See omnystudio.com/listener for privacy information.
Popular Podcasts
Betrayal Season 5
Saskia Inwood woke up one morning, knowing her life would never be the same. The night before, she learned the unimaginable – that the husband she knew in the light of day was a different person after dark. This season unpacks Saskia’s discovery of her husband’s secret life and her fight to bring him to justice. Along the way, we expose a crime that is just coming to light. This is also a story about the myth of the “perfect victim:” who gets believed, who gets doubted, and why. We follow Saskia as she works to reclaim her body, her voice, and her life. If you would like to reach out to the Betrayal Team, email us at betrayalpod@gmail.com. Follow us on Instagram @betrayalpod and @glasspodcasts. Please join our Substack for additional exclusive content, curated book recommendations, and community discussions. Sign up FREE by clicking this link Beyond Betrayal Substack. Join our community dedicated to truth, resilience, and healing. Your voice matters! Be a part of our Betrayal journey on Substack.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by Audiochuck Media Company.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.