Australia’s banks have been bundling mortgages into securitised packages to access emergency funding from the Reserve Bank, if they were ever to strike cash troubles.The RBA’s assistant governor of financial markets, Guy Debelle, has revealed eight Australian banks had taken the advice of the central bank and APRA, the prudential agency, to package and securitise residential mortgages which had been held on their balance sheets.
The move would allow the banks to effectively swap the residential mortgage-backed securities (RMBS) with the Reserve to secure funding quickly if it was facing a liquidity shortfall.
» Banks prepare for worst – The Age, 28th June 2008.