A full removal would of course eliminate any efficiency cost, and could be done alongside the deployment of a less intrusive tool if we are still worried about residual risks.
But on the flip side a permanent LVR setting will continue to guard against the very risky forms of lending, and may better prepare the banking system to adapt to a more restrictive calibration if risks reemerge. The efficacy of a permanent LVR setting is an important policy question for future research.