The regional banking regulator, the Federal Reserve Board of Kansas City, had to clear up the resulting financial sector collapse. Securitisation remains a vital instrument for reducing risk for financial systemsThis spreads the exposure to shocks in the local economy more widely. In addition, the proceeds of the sale of the loans allow the banks to continue offering mortgages to the local population. It has taken more than a decade to sort out the lethal combination of risky lending and over-indebtedness in the run up to the crash. The push to further restrict the banks’ ability to manage their loans will raise interest rates for all borrowers.

Source: The Irish Times April 05, 2019 04:41 UTC