Banks Should Not Let Lending Practices Slip: RBA The Reserve Bank of Australia (RBA) has warned banks not to let lending standards fall as the financial sector could be shaken from any debt blow out under a housing price correction. In its biannual financial stability review (pdf), the central bank stressed the importance of the financial sector avoiding excessive risk-taking in the form of looser lending standards or relaxation of internal limits. “Even if lenders do not weaken their own settings, increased risk-taking by optimistic borrowers could see a deterioration in the average quality of new lending,” the review said. “This would weaken the resilience of businesses and households, and so the financial system, to future shocks.”