Forex news.
Market hopes for creation of Australian mortgage agency not completely dashed despite comments from Australian Treasure Wayne Swan pouring cold water on U.S. agency model. Swan says U.S. agencies Fannie Mae, Freddie Mac "beset with many difficulties." However, Swan's comments more likely attempt at avoiding definitive line on proposal from some in securitization market pushing government to create mortgage agency. Also comes ahead of parliamentary inquiry into competition in banking sector, which plans to look at agency model.
Canadian agency model, which more explicitly backs its mortgage bonds with government guarantee than Fannie Mae, Freddie Mac, likely to be example more seriously considered. Agency has broad support from smaller non-bank lenders that have struggled to raise funds through illiquid securitization market, has been opposed by larger industry participants who say agency will create moral hazard for securitization industry.(SRH)
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