The Federal Government has released the first round of issued bonds in an attempt provide cheaper, more stable and longer term funding for the country’s financial system. Treasurer Wayne Swan also said the reform was aimed at increasing credit availability.  

 

“All Australian banks, credit unions and building societies can now benefit from the issuance of covered bonds to access cheaper sources of funding,” Mr Swan said.

 

The Government last month passed legislation to allow covered bonds after working closely with our financial institutions and regulators over two years to develop a framework for their issuance.

 

“Covered bonds offer institutional investors more security over their investment than normal bank bonds so they are willing to lend to our financial institutions for less,” Mr Swan said.

 

“With continued volatility in global financial markets, allowing our financial institutions to issue covered bonds is a critical economic reform to strengthen and diversify our financial system's access to funding in offshore wholesale capital markets.”