Reflecting further on the risks facing our banking system, I dug out some fairly long-term house price inflation data from the BIS for 19 OECD countries. I was slightly hesitant about doing so, because there is a risk of feeding the narrative that vanilla lending secured on residential property is likely to be an important independent element in any financial system stress. As the Norges Bank has pointed out, and as the Reserve Bank has affirmed, that just hasn’t been so historically. To the extent that the United States last decade may have appeared an exception, it is important to recall that the heavy role Congress and the Federal government played in driving down lending standards, and the non-vanilla nature of much of the lending.
But for what it is worth, here are a few charts. In all cases, the latest observations are for the December 2014 quarter…
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Utopia, you are standing in it! 
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