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You don't think they should have a say in factors that may affect the stability of the financial system given they backstopped the banks during the GFC? Normally they might be able to raise the cash rate target, but that's probably off the table given the weak state of the economy/business...

The suggestion in the OP is not an LVR cap, but higher interest rate buffers which might be more difficult to work around (especially if lenders were required to add the larger buffer to an investors entire loan portfolio). "...could potentially include a tightening of "interest rate buffer"...