This caution and the small size of the domestic market, which limits local options, have contributed to New Zealand households not building up financial assets to the same extent as has happened in the US. However, it has also meant that New Zealand household balance sheets did not take such a hit from the techwreck and post-9/11 downturns in the markets.
Against this background, I will touch upon the sub-prime crisis in the US with the objective of distilling the lessons that can be drawn for the development of housing finance. I will then dwell upon the developments in housing finance in India with a particular reference to banks.