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The federal government looks likely to initiate another round of RMBS funding support to promote competition in the banking sector, the Sydney Morning Herald reported this morning.
National Australia Bank’s acquisition of Challenger’s mortgage management business yesterday further highlighted the increasing dominance of the banks and weakening competition in the market.
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According to the daily, Treasurer Wayne Swan is understood to have received advice from his department on a range of options to help promote competition among lenders.
Industry speculation suggests the government will extend its $8 billion RMBS support program, which will be officially exhausted next month.
Patrick Tuttle, deputy chairman of the Australian Securitisation Forum (ASF) told Mortgage Business that he was unsure if and when the government would make an announcement regarding their stance on RMBS.
According to Mr Tuttle, the ASF has made it clear to the government that they need to invest more funds into RMBS if the commercial property market is to subsist.
“We are aware that the government’s $8 billion support program is coming to an end and we believe the next best step would be for them to issue a package of options including a government guarantee over RMBS as well as continued government purchases of RMBS to stimulate liquidity,” he said.
“Implementing a range of options would have the most immediate and widespread impact on competition.”
