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Govt injects $4b into RMBS

by Staff Reporter7 minute read
The Adviser

Staff Reporter

Treasurer Wayne Swan has announced he will pump an additional $4 billion into residential mortgage backed securities (RMBS) to ensure Australia’s smaller lenders remain competitive.

The latest cash injection brings the government’s total investment in the RMBS market to $20 billion since late 2008.

“The latest cash injection highlights our strong support for this vital funding market that helps smaller lenders compete with the big banks,” Mr Swan said in a statement.

The Treasurer’s decision came after a week of heavy activity in which $4 billion of mortgage backed securities transactions were launched or priced.

Citibank launched an offer of $760 million in RMBS – its first transaction since May 2008.

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