Key principles guiding this work are that the measure must be simple and  2  BIS Review 38/2009  transparent, and it must address issues related to accounting differences and off-balance sheet exposures, among others. Finally, it needs to interact with the risk based measure in a prudent but sensible manner.
Specifically, we want to see household debt levels remaining stable relative to incomes, prudent lending standards from banks, and moderate house price inflation. If these conditions are met, we are inclined to continue easing the restrictions. In the long term, we face a choice between removing the LVR restrictions and maintaining a permissive setting.