New Zealand households have unknowingly become risky investors during the current period of low interest rates, Reserve Bank Governor Alan Bollard said last night.
Wednesday, October 15th 2003, 6:40AM
by The Landlord
Dr Bollard said in notes to a speech for the Auckland Club that the Reserve Bank was concerned about the potential down side, not only for overstretched households but also the financial system and the economy.
Kiwis did not understand that investing in the current low inflation environment, with the accompanying low interest rates, could be quite different to investing in past periods of high inflation.
"I suspect that too many households may be over-exposed to real estate investment, and that too many are becoming increasingly exposed to relatively high risk financial investments without fully appreciating the risks involved," Dr Bollard said.
