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Date Published : Friday, September 26, 2008
There could be a greater level of investment in residential mortgages in Australia, if the federal treasurer gets his way.
Wayne Swan is calling on the Australian Office of Financial Management (AOFM) to pour more funds into homebuyer loans, ABC reports.
Speaking after the close of markets, Mr Swan said that such an investment will make the sector even stronger and more competitive.
"The Council of Financial Regulators agreed that this action was appropriate at this time to support competition in mortgage lending," he said.
"This initiative gives the AOFM a role in making our already strong banking system even stronger and even more competitive."
Mr Swan has instructed the AOFM to make two payments of $2 billion into the residential mortgage-backed securities market , creating an unusual situation whereby the government will own mortgages until financial conditions stabilise.
The move also has the backing of the opposition, with spokesman Joe Hockey saying that the policy is based on his party's ideas.
Mr Swan's assistant Chris Bowen has also been busy setting up a new team of experts to help place Australia on the world finance map.
Mark Johnson, formerly of Macquarie Bank, will head a group of experts assembled to advise the government on establishing the country as a financial centre.
The news follows reports that Australia's financial sector is unlikely to face the same crises that have been witnessed in the US and the UK.
While NAB and ANZ are among the institutions reported by Reuters to be awaiting the mooted sector bail-out by the US, other banks are showing resilience.
See the latest on the new Woolworths credit card.
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