NAB banker says mortgage lending bias unhealthy

The bias in the banking system towards home lending means less credit to allocate to the economy's most productive area, business, a leading business banker said yesterday.

National Australia Bank head of business banking Joseph Healey said the shift towards home loan business by some of the big banks could undermine Australia's long-term economic growth prospects.

Speaking at an American Chamber of Commerce lunch in Sydney yesterday, Healey said the flow of funds into housing could be spurring an "asset bubble", which would also be damaging for the economy.
 
Healey said: "The risk is that lending biased to one sector may crowd out lending to other sectors that are more critical to ensuring long-term growth.

"This is ultimately bad for growth, bad for competition, bad for jobs, bad for business and in the end bad for Australia."