Of course, when banks originate and hold loans, they internalize the costs of their own underwriting standards, and so have strong incentives to screen borrowers and enforce contractual covenants, as appropriate. 5 Investment banks also served important roles in financial intermediation. Somewhat unlike commercial banks, investment banks traditionally acted more as agents, distributing, rather than holding, most of their resulting exposures.
Manuel Sánchez: Mexico in a weak global environment Remarks by Mr Manuel Sánchez, Deputy Governor of the Bank of Mexico, at Morgan Stanley’s Mexico’s Moment Investor Conference, Mexico City, 17 June 2013. *  *  *  It is a privilege to participate in this conference dedicated to examining investment opportunities in the Mexican economy.