BIS Review 39/2010  3  of funds to these lenders which did not have the deposit base of the financial institutions. These lenders had no balance sheet, little capital and no branch structure and hence were low cost operations with a large degree of flexibility.
In subsequent years, the regional banks, along with credit unions and building societies, also made significant use of securitisation as a relatively cheap source of funding. The major banks also issued RMBS to diversify their funding base but it was never a large part of their funding.