Aussie banks snap up RMBS for LCR boost

By Tom Porter
24 Jul 2014

A strong bid from Australian banks looking to bolster their stock of liquidity coverage ratio (LCR) assets has helped Members Equity Bank triple the size of its SMHL 2014-1 RMBS and price a few basis points tighter than the last comparable deal.

Under Basel III, from January 2015 banks are required to hold sufficient level 1 high quality liquid assets (HQLA) to survive a 30 day systemic stress period.

Because of the relatively small volume of outstanding Australian government bonds, the Reserve Bank of Australia provides its banks with a committed ...

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