Macquarie Bank confirmed recently that it is advising the China Construction Bank on setting up a pilot program to start mortgage-backed securitization in Shanghai. The bank, one of Australia's leading originators of home mortgages, is now working on getting approvals for the program from the central bank, the People's Bank of China (PBOC), said Tony Gill, managing director of Macquarie Securitisation in Sydney.

Shanghai, one of China's most developed financial markets, has long been studying the merits of MBS and laying the groundwork of a domestic mortgage market. The PBOC recently mandated its Shanghai branch to carry out a feasibility study on the subject (ASRI 5/31/99, p.16).

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