A low growth, low inflation environment also makes progress on fiscal sustainability difficult and leaves countries with high debt-to-gross domestic product (GDP) ratios vulnerable to adverse demand shocks. Against this backdrop, uncertainty about Britain’s future relationship with the European Union could damp business sentiment and investment in Europe. Japan remains greatly challenged by weak growth and low inflation.
In principle, and indeed often in practice, the originate-to-distribute model spreads risk and reduces financing costs, offering greater access to capital to a wide range of borrowers while allowing investors greater flexibility in choosing and managing credit exposures.