Serious problems with the structure of incentives also emerged in the application of the so-called originate-to-distribute model to subprime mortgages. To satisfy the strong demand for securitized products, both mortgage lenders and those who packaged the loans for sale to investors were compensated primarily on the quantity of “product” they moved through the system.
The Eurosystem has contributed substantially to an integrated European financial market by providing the market infrastructure which enables the safe and efficient flow of payments and financial instruments across Europe. But the work is by no means complete. The European financial market faces digitalisation challenges from both the regulatory and the technical side. Let me give a few examples.