Commercial banks will be big buyers of agency MBS this year and help keep mortgage rates in check after the Federal Reserve withdraws from the market, according to the head of securitization strategy at Barclays Capital.

Managing director Ajay Rajadhyaksha said the banking sector is flush with cash and it normally starts buying — securities as the economy comes out of recession. "I would expect $400 billion to $500 billion of buying from banks in securities — primarily agency MBS in 2010," he told reporters. "I am not worried about mortgage-backed securities being bought," he added.

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