Rather than a regional bank in the US, for instance, holding a dangerously undiversified holding of credit exposures
in that particular region, which created the danger of a self-reinforcing cycle between
the decline in a regional economy and the decline in the capital capacity of regional banks, it
was much better to package up the loans and sell them through to a diversified group of end
investors. Securitised credit intermediation could reduce risks for the whole banking system,
since while some of the credit risk would be held by the originating bank and some by other
banks acting as investors, much would be passed through to end non-bank investors.