A survey by the ABC's
Four Corners of the losses and management practices at some mortgage funds elicited some policy conclusions from ASIC chair Greg Medcraft.
"It's a global problem, shadow banking, and, frankly, my view is that if it acts like a bank it looks like a bank. [And] if investors think it's a bank, then it probably should be regulated like a bank," Medcraft said in the ABC report, which was broadcast last night.
Four Corners highlighted claims by one - still solvent - mortgage fund, LM Investments, that its managed performance fund is a "bank-like facility".
The ABC also quoted one LM executive, in a pitch to financial advisers, asserting that "we are regulated as a private bank", as well as being regulated as a fund manager.
The former is not true, though the latter is true, with LM Investments subject to the Australian Securities and Investments Commission's disclosure requirements on debenture issuers.