RESERVE Bank of Australia assistant governor Guy Debelle says a recovery in the country’s securitisation market has encouraged some small mortgage lenders to return to the market.
Speaking at a conference in Sydney today, Mr Debelle said “smaller lenders’ market shares have risen slightly over recent months, though they are unlikely to return to pre-crisis levels anytime soon” with the country’s four largest banks having significantly improved their market share during the crisis.
Mr Debelle said smaller lenders have become more competitive because securitisation was becoming “a more viable source for lenders”.
Yield spreads on newly issued residential mortgage-backed securities have narrowed to around 130 to 135 basis points over swap, from over 400 basis points in the secondary market at the height of the global financial crisis.