AUSTRALIA - The federal government had been urged by the Australian Securities Forum (ASF) to enhance the country's mortgage backed securities (MBS) market and encourage superannuation fund investment in the field.
Greg Medcraft, executive director and CEO, ASF, said: "Investment hungry super funds and other institutional investors are also expected to benefit from an enhanced model that would deliver a new source of government guaranteed fixed income securities."
Medcraft added: "Importantly, the long term stability and solvency of the financial system will be strengthened by increased competition, transparency and liquidity."
He cited the Canadian system which employed a government agency to issue three or five year bonds secured against a pools of eligible insured mortgages.
The product, according to Medcraft, had the same characteristics as a government bond, but produced a higher yield.
The ASF said it planned to meet with the government and institutional investors to gather feedback on the proposed model.
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