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ISCOVER
Staff Reporter
The treasury is urging the federal government to reduce its financial support for the residential mortgage-backed securities (RMBS) market.
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Since the GFC the government has given $15.2 billion in 59 securitisation deals, helping 20 smaller lenders fund their loan activities, according to The Australian Financial Review.
A treasury document said not only would those funds be exhausted by the end of the year or early 2013, but the document recommended that the funds not be renewed.
“Before this time, the government should formulate policy objectives to help finalise the transition towards an RMBS market that is independent of government support,” the Treasury said.
But a spokesperson for Mr Swan said the views of the Treasury were not echoed by the government at the current point in time.
“The government has not taken any decisions regarding future investments; the treasury and AOFM (Australian Office of Financial Management) will continue to monitor market conditions,” the spokesperson said.
Twenty regional banks, credit unions and non-bank lenders, including ME Bank, Bendigo and Adelaide Bank, FirstMac, RESIMAC and Bank of Queensland have benefited from the RMBS funding.
