One of the less appreciated fallouts of the market-based financial system, which is that over the years there has been an increasing tendency in encumbrance of parts of banking assets either for issuance of various classes of debt/hybrid securities or to raise short term funds through money markets.
Protection accorded to secured creditors as against unsecured creditors and depositors in case of banks, in a sense, goes against the basic model of banking which presupposes deposit mobilization by banks thereby requiring strict regulation.