Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Govt under pressure to promote competition

Staff Reporter 4 minute read

With the federal government’s $8 billion support package for the securitisation market all but drained, second tier banks and non-bank lenders are now seeking further guarantees of government support to ensure market competitiveness.

Challenger’s general manager of distribution, broker platforms and lending, Steve Weston, is calling on the government to guarantee mortgage backed securities in the same way that it has guaranteed the banks.

“If the government was to guarantee mortgage backed securities, it would give the industry a greater appetite and inevitably promote competition – which has been severely lacking of late,” Mr Weston said.

The Australian Securitisation Forum recently commissioned a report into the debate and found that a government guarantee over

Advertisement
Advertisement

RMBS was the best method to boost securitisation markets, coupled with continued government purchases of RMBS to stimulate liquidity.

The report, compiled by Access Economics, said this option would have the most immediate and widespread impact on competition.

Sean Macnamara, general manager of non-bank lender Mortgage Corporation Network said the government’s $8 billion support package was not nearly enough to reintroduce competition in to the market.

“The government needs to inject $25 billion to $30 billion into the market each year and a direct percentage of that funding needs to be given directly to smaller originator managers,” Mr Macnamara said.

“This kind of funding would not only serve to promote competition but also drive jobs as well. To put $8 billion on the table for an industry worth $250 billion plus is simply not good enough.”

PROMOTED CONTENT


According to the Access Economics report, a failure by the government to provide support will intensify the market share shift towards major banks.

Govt under pressure to promote competition
default
TheAdviser logo

If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Early bird tickets are on sale now. Work smarter, not harder, this year.

default

 

more from the adviser
uptick graph Non-majors and non-banks continue to dominate: Broker Pulse

A greater proportion of brokers are sending their clients to non-...

construction equipment ta Demand for excavators up 191% YOY: CBA

The major bank’s data has revealed a jump in asset finance grow...

mortgage money house Hot Property: The biggest property headlines from the week 7-11 June

The weekly round-up of the biggest news stories from across Momen...