In terms of household debt, income growth hasn’t kept pace with increases in borrowing, since mortgage growth continues to rise. More borrowing was expected, given the reductions in our policy interest rate earlier this year.
The credit default swaps market has grown more than eight times in (gross) market value during the last two years. I suggest that monitoring and risk management measures needs to be intensified, to closely monitor the dynamics of the derivative markets and to strengthening the financial infrastructures by improving arrangements for clearing and settlement of OTC derivatives in order to reduce systematic risks.