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Govt urged to help banks improve their funding base

by Nick Bendel9 minute read
The Adviser

Suncorp Bank has called on the federal government to develop a “national funding strategy” to promote stability and competition in banking.

Suncorp Bank told the Financial System Inquiry that a “national funding strategy” is required to calmly and comprehensively analyse all the challenges of Australia’s funding needs.

It recommended that there should be support for the development of a strong and liquid secondary residential mortgage-backed security market.

Suncorp Bank’s submission said the GFC had proven the value of diverse and stable funding sources.


“It is imperative – particularly for stability, efficiency and competition – that banks have access to as wide a funding base as possible, by both product and jurisdiction,” it said.

Confidence in the system is undermined when “important players dip in and out of the market”, according to Suncorp Bank.

“Australia needs a robust, diverse and good quality range of funding sources that are able to carry the industry through any kind of stress,” it said.

Suncorp told the federal inquiry that products such as securitisation and covered bonds offer a practical means of managing Australia’s exposure to housing finance.

“These funding sources are particularly important for regional banks, and steps should be taken to ensure that these funding sources remain stable and resilient,” the bank said.

[Related: Suncorp creates new tier of broker support]

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