23 October 2012 6:48am

Banks may have to look for a wider range of investors for the junior tranche of mortgage-backed and asset-backed securities if the Australian Prudential Regulation Authority proceeds with plans outlined yesterday to re-fashion the regulations that apply to this form of funding.

APRA's executive general manager, research and statistics, Charles Littrell, outlined the regulator's approach to a prudential reform of securitisation yesterday. This will be spelled out in detail in a consultation paper to be issued in the New Year.

Littrell proposed that asset-backed securities...