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Steven Ramage Citibank director of mortgages said on Brokernews that given that Australia is a small market, having four major banks suited us.

He said there was still a 10 -20% gap where other players play in the mortgage market - and that even without a Fifth Pillar there are enough players in there to fill that.

"With the GFC a lot of the securitised markets dried up, and so we need that market to return. That was the original creator in the late 90's of competition in the market that brought mortgage rates down - folks using that funding to take on the banks- so we need that market to be stimulated again," he said.

He also said that the government guaranteeing the RMBS facilities would help to stabilise the market and bring investors back in - to make it a reliable funding option.