the fallout from freddy and fanny, page-4

What about any effect in Australia. This is an extract from Bus. Spectator today.

Any idea who the Aussie institutions are? Don;t tell me ANZ again.


O: But for Australian investors and market-watchers, I was just wondering if you could just crystallise it for the Australian viewpoint. What does this mean for us?

SE: The answer is probably not very much, other than that I note that Australian institutions hold about $US39 billion worth of Fannie Mae and Freddie Mac debt as well, so for at least some Australian institutions there will be a form of relief from this. To the extent that it represents a step in resolving the mortgage crisis in the US more generally, it could ultimately lessen some of the downside risks in the international economy and some of the ongoing pressures on bank funding costs, that have led to mortgage rates being higher than official cash rates by a wider-than-normal margin. But it's much to early at this stage, to draw any of those kinds of conclusions with any confidence.