Similarly, they may be able to refinance into a new P&I loan with a longer loan term, thereby reducing required payments. Based on loans in the Securitisation Dataset, a large majority of borrowers would be eligible to alter their loans in at least one of these ways.14 Any such refinancing will reduce the demands on a borrower’s cash flows for a time.
Third, the sources of systemic risk have been changing from 2008 to date, also as a result of structural changes in international capital markets. •  Shadow banking has shown a substantial expansion in recent years. The key drivers of this trend are well known, namely, a combination of low interest rates, weak supply of credit and tighter bank regulation.