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1.Market Observations, 8.Was Sticky

4 Apr 2017 (AFR) – ASIC warns of sub-prime lending risks – ASIC’s Greg Medcraft is on a mission to avoid a US sub-prime repeat

(4 April 2017, AFR, p1, by: Jonathan Shapiro, Jacob Greber)

‘The chair of the corporate watchdog is leading a crackdown on home lending practices in order to avoid the mistakes that led to the 2008 house price crash in the United States. Greg Medcraft, who is in the final months of his tenure as the chair of the Australian Securities and Investments Commission, will target lenders and brokers that are encouraging borrowers to take on riskier and “more expensive” interest-only loans and lenders that have understated living expenses of borrowers when assessing their ability to afford a loan. “We want to make sure we don’t have a surge in defaults when rates go up, and the misery that comes with that,” Mr Medcraft told The Australian Financial Review.

Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

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