These new instruments exhibited several weaknesses that seriously hampered the efficient flow of information between originators and investors. In the end, the new instruments of credit risk transfer “distributed fear instead of risks” (Borio 2008). Already stated by Walter Bagehot in his classical treatment “Lombard Street” in 1873, "credit means that a certain confidence is given, and a certain trust reposed”.
Thus, it was not surprising that, in the end, the turbulences on a special segment of the US mortgage market had the power to develop into a general turmoil on credit markets and into a crisis of confidence between the still most important intermediaries on current financial markets, i.e. banks.