Rising debt-to-income (DTI) ratios of new borrowers in New Zealand have caught the eye of the Reserve Bank of Australia (RBA).

The RBA is similar to the Reserve Bank of New Zealand (RBNZ) in that it produces two reports each year on the stability of the local financial system.

And since Australia's big four banks each have considerable businesses in New Zealand, the RBA also keeps on eye on what's going on here.

So when it says that rising debt-to-income ratios for new lending in New Zealand pose additional risks, not just here, but to Australia's financial system, we should take note.

New Zealand bank bosses reckon an ideal DTI ratio in the local context would be about five to seven times. Worryingly, most borrowers are at levels more like nine to twelve times. See more on that here.

The RBNZ last year asked the government to add a tool limiting debt-to-income ratios to its macro-prudential toolbox. As Governor Graeme Wheeler explained to Parliament's Finance and Expenditure Select Committee in February, a DTI tool would complement the Bank's ability to restrict high loan-to-value ratios on home loans.

But Finance Minister Steven Joyce kicked the policy into touch, effectively until after the 23 September election. Many have argued that this was due to the prospect of a load of bad press ahead of the general election. (Think front pages full of aspiring first home buyers unable to get on the property ladder because the mortgage required would have been too high compared to their incomes).

The RBA on 13 April released its latest semi-annual Financial Stability Review. Below are its comments and charts on New Zealand. It also focuses on risks faced by New Zealand's dairy farming sector: