In addition, while credit risks are transferred among financial intermediaries based on their ability and willingness to absorb such risk, increasingly credit risk has been transferred from highly leveraged financial institutions to those with much larger equity coverage.
For example, not only has a significant part of the credit risks of an admittedly few large U.S. banks been shifted to other U.S. and foreign banks and to insurance and reinsurance firms here and abroad, but such risks also have been shifted to pension funds, to hedge funds, and to other organizations with diffuse long-term liabilities or no liabilities at all.