Lowe Stamps Asset-Bubble Policy on RBA After 25 Years in Waiting
- New governor presses signature issue at parliamentary hearing
- Lowe gives three hours of testimony in his first week on job
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For a quarter-century, Philip Lowe and a small band of like-minded peers pressed the need to manage credit growth and asset prices, sometimes to incredulous colleagues. Now, as Reserve Bank of Australia’s new governor, his theory has more sway.
In his first testimony to a parliamentary committee Thursday, Lowe emphasized the signature issue he’s developed since the early 1990s, which has found a more receptive audience in the wake of the 2008 financial crisis. Sure, the RBA could probably return inflation to target faster with looser policy, Lowe acknowledged, but doing so would risk igniting a new round of borrowing among already debt-laden households.