Thursday, 27 June 2013

Still no credit data?

Last December, the Reserve Bank made some changes to the statistics it publishes at the back of each Monetary Policy Statement. It rejigged the actual (historical) inflation statistics, dropping a few and adding producer price indices. It kept the same suite of surveyed inflation expectations. It added three surveys of businesses' pricing intentions and costs experienced. And, most importantly, it added three measures of asset prices - house prices, farm prices, and the NZX50 index of share prices. It was a clear signal of where it thought its priorities needed to be.

I'm baffled, though, why there are still no measures of bank lending. You'd think that with the Bank now looking seriously at controlling the ease with which banks make loans or people get them - 'macro prudential' measures, as they're called, and the theme of a speech by Deputy Governor Grant Spencer today - there would be at least some data included on the likes of private sector credit or lending on housing.

Here, by the way, is the recent history of housing lending: as you can see, lending on housing is picking up (+4.9% year to April) but it is still quite modest growth by the standards of the early 2000s.


And here is total lending to the (resident) private sector over the same period.


Again, it's picking up a bit, but in April was running only +3.7% on a year ago.

Frankly, I'm not too sure what to make of these trends. On the face of it, they rather suggest that recent sharp increases in house prices in some parts of the country don't seem to be accompanied by any evidence that the banks have been opening their doors and saying, "fill your boots"....

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