Unfortunately, the crisis has revealed a significant lack of suitable instruments for effectively dealing with failing financial institutions. These gaps in  BIS central bankers’ speeches  1  legal frameworks must be addressed. SIFIs, too, must be able to exit the market in an orderly manner that does not expose taxpayers to the risk of loss.
It is intended to disperse credit risk to those who are better able to assume such risks and absorb the corresponding losses, and as such it increases welfare. We know by now that securitisation can also increase risk-taking and thus the fragility of the financial system as a whole. Some elements of regulatory reform already address this problem.