I'll turn now to some issues regarding financial institutions and their regulation. I'll focus on a few issues related to the models of operations in these institutions, the management of risks, and the management and regulation of liquidity.
We can now see that one of the key problems with securitized U.S. subprime mortgages rested with the so-called "originate and distribute" model in which mortgage originators, many of whom did not face the same regulations as banks, entered into mortgage contracts with homeowners, and then laid off these assets as they were securitized.