Treasurer Wayne Swan announced today that the Federal Government will invest a further $8 billion of taxpayers’ money in new residential mortgage-backed securities (RMBS) to support the home lending market.
The government first stepped in to support the RMBS market last year investing an initial $4 billion to boost competition in the mortgage market in September 2008.
“The Government will direct the Australian Office of Financial Management to provide up to a further $8 billion of support to new issuances of high-quality RMBS, depending on market conditions,” Swan said today.
“This investment will provide a major boost to smaller lenders and promote competition in the mortgage market, helping to put downward pressure on borrowing rates over time.”
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