The resurgence of Australia's securitisation market looks set to continue in 2018, but there are few signs that three of the four major banks are likely to step up mortgage-backed issuance any time soon.Domestic mortgage-backed issuance posted its strongest year in 2017 since the global financial crisis paralysed capital markets in 2008.Australian issuers securitised more than A$36 billion worth of mortgage assets, with regional banks and non-bank lenders accounting for the bulk of issuances.It was the first time that RMBS issuance exceeded $30 billion since 2007, when Australian lenders securitised around $50 billion of residential mortgages.The resurgence of securitisation is somewhat remarkable given that it has coincided with a sharp reduction in activity by the major banks.According to a review of the Australian RMBS issuance by Macquarie debt market analysts, the majors collectively accounted for only $5.05 billion of local securitisations last year.That represented only about 13 per cent of total local issuances, rendering 2017 the weakest year for major bank securitisation activity since 2012.In 2016, the majors completed $7.65 billion worth of mortgage-backed programs.Non-bank lenders, led by Pepper, Liberty and Resimac, are responsible for most of the recent growth and collectively accounted for 40 per cent of total local issuances last year.There is little evidence to indicate that the big banks are primed to make a return, with most experts expecting the majors to remain passive for some time.NAB might be the exception after it launched a $2 billion RMBS program last month, which included the first tranche of green mortgages marketed to investors in Australia.RBA Assistant Governor Christopher Kent yesterday offered an explanation for why the big banks are mostly avoiding securitisation as a source of funding."One reason the majors have not been more active is that, even with the decline in RMBS spreads, pricing is not particularly attractive for them," he told the Debt Capital Markets Summit in Sydney."Rather, alternative sources of funds - such as unsecured wholesale markets - remain more attractive because spreads in those markets have also narrowed."Kent said many small banks and non-bank securitisers had limited access to long-term wholesale funding, particularly in offshore markets."So, they cannot avail themselves of the favourable terms currently on offer there," he said.The securitisation boom is mostly being driven by heightened demand from investors for mortgage-backed paper.Strong bidding for local issuances has resulted in a tightening of spreads, which has fuelled the recent waves of activity by small lenders.While the investment appetite is not likely to diminish in the near term, Macquarie noted in its report that the future performance of underlying mortgage assets might be influenced by the rate of wages growth in the Australian economy."We see low wages growth acting as a slow drag on performance, leading to a gradual increase in arrears through time," the Macquarie report stated."Conversely, if wages growth picks up, then we are likely to see some improvement in mortgage performance overall." Macquarie does not expect the performance of mortgage-backed assets to change dramatically in the near-term."What we don't expect is