The Reserve Bank of New Zealand could announce that within days it will be using one of its new macro-prudential tools to reduce risks to banking system stability from any future slump in an over-valued housing market.Bank economists see comments from RBNZ governor Graeme Wheeler, made in a speech early on Thursday, as a toughening up of his resolve to use the tools quickly in response to the surge in house price inflation which has occurred in tandem with a very strong New Zealand dollar.The central bank and prudential regulator has moved quickly through early 2013 to consult on and create a set of four macro-prudential tools, including the potential for 'speed limits' on high loan-to-value ratio (LVR) mortgage lending.  It is looking for new tools to supplement its official cash rate, given it thinks it is stuck between a rock and a hard place when it comes to monetary policy. It can't justify an OCR hike to slow the housing market because of low inflation and the risk this would further inflate the New Zealand dollar. But it also can't cut interest rates to lower the currency because that would further inflate the housing market. "Today's speech, by Governor Wheeler, reinforced… [the desire to prepare the] markets and the populace for a near-term announcement on prudential policy measures," said BNZ's head of research, Stephen Toplis.  A move was possible within days, he added.Wheeler said, in a speech to the Institute of Directors, in Auckland, that the five major banks had increased their high LVR lending (greater than 80 per cent) to 30 per cent of new lending, up from 23 per cent in October 2011. Households also remained highly geared, with debt to disposable income standing at around 145 per cent and rising.Wheeler pointed to the IMF's estimate that New Zealand house prices were 25 per cent over-valued and the risks of a significant correction this poses to a mortgage-dominated banking system. He cited the bank's agreement with the Government earlier this month on a framework to use four macro-prudential tools, including limits on high LVR loans."While there are important design issues to address in devising such measures, the empirical evidence to date suggests that, during episodes of quickly rising real estate prices, LVR limits can help reduce the incidence of credit booms and decrease the probability of financial distress and sub-par growth following the boom," Wheeler said."One should be cautious in predicting the size of the impact of such measures when house prices are increasing rapidly, but we believe that macro-prudential instruments could have played a useful role in building up capital buffers and reducing credit demand and asset price pressures in the housing price boom of 2003 to 2007," he said.A Reserve Bank final policy position paper released this month showed the bank preferred to impose "speed limits" on any bank's proportion of new high LVR lending, rather than imposing harder outright bans on such high LVR lending.