IMO, it does. Without Wall St. the banks would be holding more of
their own paper. The money wouldn't be made so much from
originating the loans as holding them. They would naturally be more
careful with their own portfolio.
OTOH, once the investment houses got involved, anything with a AAA
rating was the same as any other and "AAA" got stamped on
everything. The really silly thing was the banks were packaging and
selling known junk on the loan side of their operations, then
having their investment side buy the same junk others were
packaging. Apparently they thought others somehow had a better
class of "AAA" junk.
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