These days, the large, internationally active banks, in particular, are switching more and more to the “originate-to-distribute” model – in other words, they pool credit risks and sell them on – often to investors outside the banking system. By passing on credit risk, banks create additional scope for new lending.
Even though it is hard to verify, it is likely that the large demand for structured products has led to an increase in primary lending. Moreover, I would like to point to the fact that the distinction between bank- and market based financial systems has become blurred. Even in traditionally bank-based economies, refinancing through the money and capital market has become more popular.