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The Reserve Bank of Australia’s assistant governor Malcolm Edey has said the substantial market share held by the major banks could unwind naturally as the securitisation markets begin their recovery.
The major banks currently write about 90 per cent of all new mortgages, rising from its 75 per cent market share before the credit crisis.
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Speaking at a conference in Sydney yesterday, Mr Edey said these market share shifts should be put in perspective as they followed a lengthy period when major banks were losing market share, while overall housing loan approvals had lifted more than 20 per cent in the last six months.
When asked whether or not the government would increase their support to stimulate mortgage competition outside of the majors, Mr Edey said he expects those market shares to evolve naturally.
“The priorities are now about the normalisation of conditions rather than looking for more ways to intervene and prop up institutions. That was needed in September last year, but that is behind us now,” Mr Edey said.
