SYDNEY, April 3 (Reuters) - Australia's corporate watchdog on Monday said it was launching a new round of industry surveillance to ensure banks and brokers were not recommending overly expensive interest-only loans to customers.
The move by the Australian Securities and Investments Commission follows steps announced last week by the banking watchdog, the Australian Prudential (LON:PRU) Regulation Authority, to tighten rules on interest-only loans.
"ASIC will shortly commence a surveillance to identify lenders and mortgage brokers who are recommending high numbers of more expensive interest-only loans," ASIC said.
The regulator also said that eight major lenders will provide remediation to consumers who suffer financial difficulty as a result of shortcomings in past lending practices.