Banks Should Not Let Lending Practices Slip: RBA

A man and a women walk into the Reserve Bank of Australia headquarters in Sydney, Australia, on May 5, 2015. Mark Metcalfe/Getty Images

The Reserve Bank of Australia (RBA) has warned banks not to let lending standards fall as the financial sector could be shaken from any debt blow out under a housing price correction.

In its biannual financial stability review (pdf), the central bank stressed the importance of the financial sector avoiding excessive risk-taking in the form of looser lending standards or relaxation of internal limits.