Vaccine mess tarnishes RBA's rosy review

Vaccine mess tarnishes RBA's rosy review

KEY FINDINGS OF RBA FINANCIAL STABILITY REVIEW: *Substantial support from governments, central banks and other regulators has underpinned the resilience of the financial system over the past year. *But the Reserve Bank warns against over-exuberance and extra risk-taking as asset prices rise. *Delays in mass vaccination against COVID-19 could stall the economic recovery. *Progress on vaccines has underpinned expectations for strong economic growth in the next two years. *Most households remain in a good position to service debts given low interest rates, which look set to remain on hold for several years. *The additional safety net of large mortgage prepayment buffers is also helping home owners. *The "wealth effect" of rising housing prices is easing the RBA's fears for distressed sales and mortgage-lending losses. *But if housing prices continue to rise, affordability problems will intensify, particularly as income support ends for lower-income households. *Closed international borders and changing buyer preferences bring uncertainty for apartment prices, particularly in inner-city areas. *The end of loan holidays for households and business will have a "modest" impact on bad loans. *Australian banks are in …
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