Journal Article

The rise of the originate-to-distribute model and the role of banks in financial intermediation


Abstract: This is the second article in a series which explores the changing role of banks in the financial intermediation process. It accompanies a Liberty Street Blog series. Both discuss the complexity of the credit intermediation chain associated with securitization and note the growing participation of nonbank entities within it. These series also discuss implications for monitoring and rulemaking going forward. In this article, the authors show that, beginning in the early 1990s, lead banks increasingly used the originate-to-distribute model in their corporate lending business and that the increase was largely limited to term loans.

Keywords: Secondary markets; Bank loans; Commercial loans; Credit; Nonbank activities; Intermediation (Finance);

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Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Economic Policy Review

Issue: Jul

Pages: 21-34