RBA wants the securitisation market to be more transparent
The Reserve Bank wants to see improvements in the accuracy, consistency and completeness of the asset-backed securities data it receives from industry.The head of the RBA's domestic markets department Chris Aylmer said there was little consistency in reporting around credit scores and debt serviceability metrics.Speaking at the Australian Securitisation Forum conference in Sydney yesterday, Aylmer said feedback from investors was that the process for gaining access to the data was cumbersome."The data quality is generally good, though there is still scope to improve it," Aylmer said.Since June last year, the Reserve Bank's repurchase eligibility criteria for asset-backed securities have included providing the RBA with more detailed information about the securities on issue.The data allows the RBA to manage its exposure to the securities it accepts under repo agreements for market operations. These agreements are used by authorised deposit-taking institutions to meet liquidity requirements under the liquidity coverage ratio. They are also used to cover payment settlements that occur outside business hours (when the securities are converted to exchange settlement balances).A large part of the data is also made available to investors and other permitted data users.The dataset includes information from around 50 sponsors and 270 trusts on around 1100 securities. It covers two million loans, the majority of which are residential mortgages. That is about one-third of all outstanding mortgages.For RMBS the data includes 62 fields related to the loan, such as loan balances, interest rates and arrears measures.There are 18 fields related to the borrower, such as income and employment type. And there are 13 fields detailing the collateral, including postcode and property valuation.Aylmer said useful new information that had come to light since June last year included offset balances and borrower income at origination.