As the official sector stressed over recent years, it is important to be clear about the circumstances in which risk can flow back to the banking system. 6 Second, the “twin engines” view draws too absolute a line between banks and non-bank financial intermediaries. Alongside other asset managers, banks have been material investors in securitised credit.
In some respects, it may be more useful to distinguish  4  See Churm R., and L. Webber (2007), “Decomposing corporate bond spreads”, Bank of England Quarterly Bulletin, Q4 2007 (forthcoming). 5  Alan Greenspan made this point a few times.