Competition is slowly starting to reemerge in the mortgage market, RBA assistant governor Guy Debelle has claimed.
Speaking at the recent Minter Ellison Financial Services Industry Forum, Mr Debelle said the future was looking bright for securitisation, however, he said he did not expect a return to the heady days of earlier this decade when securitisation accounted for around one quarter of the flow of housing credit.
“Securitisation will be an important part of the financial landscape in the future. Prior to the crisis, many commentators sang the praises of securitisation as a useful means of dispersing risk around the financial system, and in principle I think they were right,” Mr Debelle said.
Mr Debelle said the return of securitisation would attract competitors back into the market, which would help to keep the major banks’ margins in check.
“I believe there are good reasons to think that competitive pressures will continue to restrain the ability for any margin-widening on the part of the larger banks,” he said.