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That it "originate-to-distribute" model had pros along the old "originate-to-hold" design, where a bank originated financing to the debtor/homeowner and you will employed the financing (default) exposure. Provided Couch Ben Bernanke produced in a job interview to your FCIC in 2009 you to definitely several of your own 13 premier U.S. creditors were at risk of inability while in the 2008. The current panic inside however this is "running" to your other financial firms because of the perhaps not revitalizing sales and repurchase agreements (repo) or raising the repo margin ("haircut"), forcing enormous deleveraging, and causing the bank operating system getting insolvent. In the previous symptoms, depositors went to their banking institutions and necessary cash in replace to own the checking profile. Unlike the new historic financial panics of your 19th and you can very early 20th centuries, the current financial worry try a general panic, not a merchandising worry.
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