Therefore, banking institutions must not only evaluate potential changes in the competitive financial landscape (as I noted earlier), but must also pay attention to potential changes on the regulatory side.
The rapid growth of securitisation techniques, as the banking sector increasingly adopted an “originate-to-distribute” business model, had important implications for the economic outlook. Advocates of securitisation saw it resulting in both a better distribution of credit and liquidity risk and easier and cheaper bank access to funding. Such benefits justified the higher levels of leverage and liquidity observed from the middle of the decade.