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The RBA revealed today that it does not support the proposal of a government-sponsored agency to support the local mortgage market.
Philip Lowe, assistant RBA governor, said at the 6th Annual Retail Financial Services Forum this morning that recent changes in the industry landscape were cyclical, rather than structural, and did not warrant permanent government intervention.
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“While the availability of finance has tightened up recently, over the longer term we do not expect that a shortage of housing finance will be one of the problems that Australia will have to confront,” Mr Lowe said.
“Furthermore, as we have seen in other countries, the creation of permanent government structures in this market can have unintended consequences.”
The case for a government-sponsored entity has been strongly advocated in recent months by the Australian Securitisation Forum.
Published: 13-08-08
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