In particular, originators who securitize may inadequately screen potential borrowers unless investors provide oversight and insist on practices that align originator incentives with the underlying risk. The originate-to-distribute system is thus not only a potential source of risk to the financial system but also raises concerns regarding consumer protection.
Sources of the recent problem With this background in mind, let me turn now to the recent problems in the subprime mortgage market. As is widely known, delinquency rates on subprime mortgages have  BIS Review 126/2007  1  increased sharply over the past year.