Eric Crampton: The Reserve Bank's frog-exaggerator

In a classic Simpsons episode, the gang went out looking for the Loch Ness Monster. Professor Frink turned on his scanning scope. He watched the gauge.

Then, with horror, he announced: “Oh, my great, good God. Gentlemen, your attention, please. I am detecting a gigantic amphibious life-form. It’s 80 meters long and it’s heading this way.”

A frog hopped out of the Loch and onto his shoe.

Then Professor Frink realised that he hadn’t been using his Monster-Ometer. He’d turned on the Frog-Exaggerator.

A Reserve Bank press release this week warned, “Climate change stress test highlights flooding risks”. The first paragraph cautioned that river and surface water flooding “may pose an even greater risk to bank residential mortgage portfolios than coastal flooding.”