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Sydney - The head of Australia's central bank on Monday welcomed the move by the US government to take over ailing mortgage giants Fannie Mae and Freddie Mac, saying it was "the right thing" to do.
The US Treasury placed the mortgage agencies in a "conservatorship" on Sunday in a bid to avert a financial system meltdown from the housing crisis.
Reserve Bank of Australia governor Glenn Stevens said the move was likely to have a positive impact on the market in the near term.
"I think what the American authorities have done...is the right thing," he told a parliamentary committee in Melbourne.
The central bank's assistant governor Philip Lowe said the bail-out lessened the uncertainty hanging over the market regarding the future of the shareholder-owned firms which underpin trillions of dollars of home loans.
The move was also likely to bring about "a little" narrowing in funding costs, Lowe added.
The US move was designed to contain the damage from the worst housing slump in decades, which has led to multibillion-dollar losses for Fannie and Freddie.
President George Bush stressed the move was a temporary, "near term" intervention, but said a financial system meltdown from the potential failure of Freddie Mac and Fannie Mae posed "an unacceptable risk" to the US economy.
- AFP