The Australian Securitisation Forum's chances of persuading the government to adopt its plan for a government-guaranteed mortgage securities market may struggle in the face of opposition from some of the Forum's own members - the big banks.The ASF held a briefing yesterday to outline a series of measures it believes must be taken to "resuscitate" the securitisation market. They include the creation of a liquidity program to be run by the Australian Office of Financial Management, expansion of the Reserve Bank's RMBS repurchase arrangements, establishment of the government-guaranteed scheme and the creation of an RMBS index to appeal to fund managers.ASF chief executive Greg Medcraft said: "The market is at risk of collapse without some intervention."The centerpiece of the plan is the so-called agency model, a government supported securitisation scheme modelled on the Canadian Mortgage and Housing Corporation's Mortgage Backed Securities program. Approved lenders sell eligible mortgages to the Canada Housing Trust, which issues AAA rated Canada Mortgage Bonds. The bonds are secured by government guarantee and the underlying mortgage-insured property. The ASF proposal is for $10 billion to $20 billion of funding each year. The government backing would reduce the cost of securitisation, which would flow through to home loan rates.Economist Joshua Gans and Rismark chief executive Christopher Joye have developed a similar proposal, which has been labelled Aussie Mac.Medcraft said: "We need some government support to provide minimum liquidity in the market. Unlike Fannie Mae and Freddie Mac it would be a government agency, not a private company, it would have a limit on issuance, and the loans in the program would all be mortgage insured."Commonwealth Bank, in a submission to the House of Representatives Economics Committee inquiry into competition in the banking and non-banking sectors, described the creation of such an agency as "at best, premature".The CBA submission says: "The proponents of Aussie Mac assume the RMBS market will be permanently closed (at least on any reasonable measure of price) or that the RMBS market will suffer frequent closures of significant duration."It is highly unlikely that the market will be closed permanently and it is difficult and premature to tell if disruptions will be frequent with significant durations. This is the first major disruption of any size in the RMBS market in Australia since it first emerged in the mid 1990s."The submission said an Aussie Mac structure would distort markets by mis-pricing risk and as a result shift even more investment in housing. It would increase the riskiness of bank balance sheets, it would prop up unsustainable monoline business models, it would create bureaucracy and it could jeopardise the government's credit rating.ANZ's submission to the same inquiry says: "The proposal would introduce a permanent solution to address a temporary problem. ANZ believes the securitisation market will recover in the medium term."Westpac's head of securitisation, Craig Parker, speaking at yesterday's ASF briefing, said government support would come at the cost of increased regulation. Westpac was opposed to the agency proposal on the grounds that it did not want