Crime Against Humanity: the Holy GAAP, 29

As a consequence, required due diligence in the form of capital requirements means that the banks are required by relevant regulators to limit risks by staying below a given leverage ratio. If they want to increase their loans, turnover, and income, they have to increase their capital equity.
Which at the same time increases costs and limits profitability. And we know the profitability is proportional to risk. The forefather of the Rothschild family has been reported as saying that the moment to get it on is when blood begins to flow on the streets.

The shift from the “Originate to Hold” model to the “Originate−to−Distribute” one is the banker’s countermove to escape all capital requirements, deposit insurers, regulatory restrictions and prudential supervisors intended to keep bank risk exposure in check, and keep on increasing credit risk and leverage, and thus keep on increasing the exploitation of his privilege without any constraint whatsoever. And to keep on spreading the contagion of speculative greed.

Capital requirements target credit risk, and credit risk follows credit; if the banker gets rid of credit, he’s got rid of credit risk, too. When the banker sells the credit, not only he turns illiquidity into liquidity, but also and above all he redeems the slice of capital requirements bound by it.

If someone is to sell, someone has to buy. And the buyer can be any type of third party investor: pension funds, asset managers, hedge funds, grandparents with their grandchildren’s moneyboxes, you name it.
Or Dr. Frankenstein the banker himself can give birth to a “creature” moulded for that purpose, known as SIV, Structured Investment Vehicle. Whatever they mean by such pompous label, an SIV is intrinsically a scrapyard of sorts that in order to produce further revenues or even support itself has to entice third party investors to purchase its junk.