Reserve Bank of Australia Plans Loans for Distressed Lenders

Posted by Dan Denning on Sep 6th, 2007

Who is knocking on the door of the Reserve Bank of Australia, looking for a handout?

The Bank issued a press release this morning, telling anyone who would listen that, “it has decided to further widen the range of securities eligible for its repo operations.”

As of October 8, the list of eligible securities will include, “Australian dollar residential mortgage-backed securities (RMBS) backed by prime, domestic, full-doc residential mortgages and rated AAA or equivalent,” and “Australian dollar asset-backed commercial paper (ABCP) backed by prime, domestic, full-doc residential mortgages (either directly or in securitised form) and rated P-1 or equivalent.”

Are you still with us? Good. What does it mean?

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