15 Besides, securitisation affects banks in many different ways that may render them more sensitive to changes in monetary policy (e.g. by tightening the relationship between banks’ funding ability and conditions in wholesale capital markets). An additional issue that has become rather topical over the past year is the potential impact of securitisation and the “originate-to-distribute” model on financial stability.
As mentioned earlier, in principle the ability to securitise loans should enhance the banking sector and reduce the likelihood of the credit busts and banking crises that have historically posed a major threat to financial stability in many economies.