Bad Paper

Australia’s central bank has now joined the party in buying mortgage assets in an effort to provide liquidity to the troubled market.  The central bank purchased $780 million of home-loan bonds according to an article in Bloomberg.

Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors is quoted in the article saying “The Reserve Bank’s attempt to kick-start the mortgage-backed securities market would be having a positive impact on the banks. They don’t normally buy mortgage-backed bonds for that length of time and it may help kick start that part of the market.”