Change is a constant, and change in the financial markets is no exception. The 2008 financial crisis resulted in profound changes in many aspects of financial markets. Investors and rating agencies demanded wholesale changes in securitization. The result of those changes is that today’s structured credit products bear little resemblance to the risky, highly-levered, undiversified structured credit products that played a role in the 2008 crisis. Structured credit products now provide investors with better diversification, credit enhancement, and structural protections. As banks have pulled back from lending to U.S. businesses and consumers, these new, safer forms of securitization have provided the necessary financing for credit cards, cars, homes, commercial real estate, consumer loans, and small and medium-sized businesses.
