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.
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“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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