The government will be injecting $4 billion into the mortgage market to encourage competition:
Mr Swan revealed the Australian Office of Financial Management (AOFM) would buy mortgage-backed securities from smaller lenders, non-banks and building societies.
There would be two tranches of $2 billion each, possibly more. Part of the money would come from the 2007-08 Budget surplus, which came in $2.9 billion higher than expected at $19.7 billion.
The AOFM will buy residential mortgage-backed securities (RMBS), which are AAA-class arrangements and not the high-risk "toxic loans" plaguing the US. In the long term, the AOFM should make a profit.
Anyone watching Q& A last week would have heard Malcolm Turnbull propose the same plan. The Howard government accused the Rudd opposition of stealing their policies. It looks Rudd & co still need the Liberal to provide the with ideas.
No comments:
Post a Comment