From asset to liability

摘要

The dirty secret of the golden age of finance was that it was obscenely easy to make money. The supply of credit was seemingly inexhaustible, so banks could fund their expansion at will. Demand was equally insatiable, providing those infamously complex structured products with a stream of ready buyers. The years of plenty disastrously skewed risk models, allowing banks to run with lower capital on the assumption that past performance was, contrary to the industry's standard advice, a guide to future returns. And the theory that risk had been dispersed because of securitisation added to the false sense of security.