Opposition support clears path for covered bonds legislation
Australia's federal opposition has offered in-principle support to legislation, slated for early 2011, that will for the first time allow domestic authorised deposit-taking institutions (ADIs) to issue covered bonds. In a statement, the shadow treasurer, Joe Hockey, highlights covered bonds as one of two specific measures included in the government's banking sector reforms package that the opposition welcomes.ASF welcomes government's covered bond and RMBS measures
The Australian Securitisation Forum (ASF) issued an immediate positive response to the December 12 announcement of a raft of government measures to support and expand the Australian asset-backed market via both securitisation and the introduction of covered bonds. An ASF statement says the organisation is "delighted that the government acknowledges the vital and productive role that securitisation plays".
APRA discloses transitional capital treatment for securitisation
In line with plans revealed by the regulator at the end of November, on December 10 the Australian Prudential Regulation Authority (APRA) sent a letter to banks explaining its revised capital relief approach to securitisation. The new policy offers authorised deposit-taking institutions (ADIs) a deduction from tier one capital requirements relating to the volume of subordinated securitisation tranches they have to retain on balance sheet.Swan gives covered bonds green light in banking system shakeup
Australian federal Treasurer, Wayne Swan, revealed the government's long-awaited banking system reforms on December 12. Among a raft of significant measures, Swan proposes that Australian financial institutions (FIs) should be allowed to issue covered bonds and that exchange trading of government bonds be introduced to help plans to develop a deep and liquid corporate bond market.