The downside of this model has been eloquently demonstrated in the US sub-prime related fallout globally, which I will discuss later. In India, the structured credit market is still in its infancy, primarily constituting securitization products, and the lessons of recent events can hold important lessons for the future development of this market here.
For this reason, it has not been rule bound which will require either some model or at least some measurement of systemic risk and its sensitivity to the prudential parameters.