The Reserve Bank of Australia says the US Government's effective takeover of struggling mortgage giants Fannie Mae and Freddie Mac was "the right thing" and would provide some stability and confidence in financial markets.
In a Federal Parliamentary committee meeting yesterday, Governor Glenn Stevens welcomed the intervention.
"I don't really know what that would do to off-shore funding costs for Australian banks. I can't imagine it will worsen the situation though,'' Mr Stevens said.
Yesterday, the sharemarkets responded positively to the US Governments decision, with the S&P/ASX 200 index jumping more than 3% in early trading.
Any failure by the mortgage giants would intensify the already strained US markets and push up mortgage rates, pushing more borrowers into default.
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