Australia’s Macquarie Bank has signed a co-operation agreement with China’s largest mortgage lender, reported Reuters. The venture, to be set up by Macquarie Securitisation Shanghai and China Construction Bank, will focus initially on home loan products funded by the Chinese partner and fees for expediting mortgage applications.
Macquarie said its strategy is to develop the co-operation with a view to moving into mortgage-backed securities – debts secured on a package of mortgage loans. Proposals by China’s large state-owned commercial banks for approval to launch mortgagebacked securities have been cleared by the central bank and passed to the State Council for consideration. However, much work remains to be done to build a regulatory framework that is capable of supporting these financial instruments, such as the creation of a better land registration system.