Small lenders angle for more Federal aid

Regional banks are agitating for a government guarantee on pools of mortgages sold to investors. Bendigo and Adelaide Bank said fixing securitisation was critical to ensuring funding remained available. Bank of Queensland said securitisation was the “great equaliser” between regional and major banks.

Regional banks pay a higher premium for use of the government’s guarantee on wholesale liabilities. The government has agreed to invest $8 billion in mortgage-backed securities to support small lenders but this is fully committed.

Source: The Australian Financial Review