But they never threatened the Reserve Bank's independence. Monetary stability, they knew, was vital.
John Key deserves similar credit for his deference to the Reserve Bank this year on home loan restrictions. When governor Graeme Wheeler first proposed to limit the lending that banks could do on less than 20 per cent deposit, Key made it known he thought first home seekers should be exempt.
Just about everybody would agree with him. If banks were going to be forbidden to lend more than 10 per cent of their residential mortgage book to people with low equity, it would be nice if the 10 per cent were all young families in their first home rather than highly-leveraged renters adding to their portfolio.
But Wheeler held firm, insisting an exemption for first-home seekers would defeat his purpose, which was to reduce the trading banks' exposure to loans of higher risk.
This is new territory for all concerned. Monetary authorities worldwide are toying with new powers to regulate bank lending in the light of the global financial crisis five years ago. Having added such a power to the Reserve Bank's mandate, Key and English could hardly have over-ruled the governor's first use of it. But they must have been tempted.
Wheeler came to the job a year ago from the World Bank where, living in the United States, he saw close-up the sub-prime lending disaster that led to the near collapse of the global financial system. Here, though, the banking system was sound, house prices did not plummet. Few, if any, households here saw their equity disappear, and if they did, their banks did not resort to America's epidemic of foreclosure.
In the year's following the crisis house prices fell only 5 per cent on average before recovering all their lost value and rocketing away to new heights again. It is hard to believe the Reserve Bank is really worried about lenders' exposure to high house prices. On their past performance the trading banks can be trusted to assess that risk for themselves.
The real reason for the loan-to-value restriction was probably the one that featured in Wheeler's regular monetary policy report this week: with the economy gaining strength, he hopes the loan limit might slow house price inflation sufficiently to delay a rise in the official cash rate rates next year.
New Zealand may suffer for its own economic strength if its interest rates rise and send the dollar even higher against currencies of economies that will still be living on monetary stimulants.
But whether the house-lending limits delay that damage or not, they have already paid off in one way. They have shown the mettle of the new governor.
Even with statutory independence, it cannot have been easy to resist repeated public urging from the Prime Minister to exempt first home seekers. Their plight was constantly in the news as a "housing affordability crisis".
In August, the Government announced a subsidy for those with KiwiSaver funds, letting them buy a house with 10 per cent deposit, half the level of the Reserve Bank's intended loan-to-value ratio.
With the housing crisis no doubt registering in the National Party's private polls, and the October 1 starting date for the loan-to-value limits approaching, Housing Minister Nick Smith started coming to Auckland every second week with a new project for the city. Faster consents and other incentives have been offered to developers who include an agreed proportion of low-cost units in their plans.
Meanwhile, young couples were finding banks refusing, or sometimes cancelling, pre-approved loans that would allow them to bid at auctions.
In the circumstances it is remarkable that the governor has been able to do it. Wheeler was not as well known as previous governors, Brash and Alan Bollard, before he took over.
But it took two to prove the new governor is up to it. Political leaders always have the ultimate power. When they restrain themselves as Key has, they should be applauded too.
