The Reserve Bank of Australia (RBA) says it is difficult for wholesale lenders to sell low quality mortgage backed securities (RMBS).
RBA Assistant Governor (financial markets) Guy Debelle said while it was not impossible for lenders to sell the products, it could be difficult in the current market.
“Is it expensive to sell those RMBS lower rates tranches? Yes, it is,” Mr Debelle told an audience at the Mortgage Innovation Forum in Sydney on Tuesday.
“I wouldn’t say it is true you can’t sell them at all, because we have seen some deals where that has happened.
“Is it more difficult than it was two years ago? Certainly.
“Does it increase the cost for those people relative to other participants? Yes, it does.”