New Reserve Bank rules may not work

The Reserve Bank is set to impose new lending rules on home buyers to cool down the property market.

But the Director of Massey University's centre for Financial Services and Markets doesn't think it's a good idea.

Dr David Tripe says soaring house prices are only in Auckland and Christchurch and it would have unintended consequences for the rest of the country. "The best option would probably be a general increase in bank capital. The reason for that is that bubbles are prone to create banking problems the best protection against banking problems, which is what we're actually concerned about, is for the banks to have more capital."


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