While growth in the housing market is expected to be sustained, there is increasing evidence that the rise of investment property has also been important. Housing loans remain relatively sound. However, while house financing is a profitable business for most banks, competition has intensified considerably. Today banks compete aggressively for borrowers by offering highly competitive home loan packages to meet different needs of borrowers.
10 The SEC has since begun to develop that approach. 11 The second institutional issue is the question of which regulators would make the assessment and policy tradeoffs that I contemplate in addressing financial stability risks associated with nonbank financial intermediation. The natural answer would be the regulator with authority to act.