Furthermore, these smaller institutions have been able to hold their own in the marketplace even as their numbers were diminished over the past few years by a number of bank closures and acquisitions by larger banking organizations.12 Looking more closely at the HMDA data provides considerably more information about the nature of home lending undertaken by institutions and the extent to which loans are held in portfolio or sold.
Even more worryingly, if a quantitative constraint hits the swap market, rather than just experiencing just an increase in the cost of the swap, a bank funding itself with short-dated swaps is quickly going to find itself in the equivalent of a sudden stop.