However, transferring risks does not mean that nobody will pay the bill if conditions deteriorate and those who will pay the bill are usually also bank clients (or the banks may pay compensation to holders of securitized bonds in order to minimize reputational risks); thus “securitization does not completely insulate banks” and this simple maxim tends to be ignored today.
Consumers for their part have a wider array of options to choose from and this has led to an increase demand for mortgages. At the same time, the removal of many regulatory restrictions and the increased integration of markets, especially in Europe, have led to increased competition and an overall reduction in interest rate spreads to the benefit of consumers.