A modified version of Ed DeMarcos securities-based model for housing finance reform could promote an active market for risk-sharing arrangements and further reduce systemic risk by distributing credit risk broadly.
When experiments in lending are properly organized and priced, they can be successful for borrowers and lenders of all income groups, even in tough times.
Rather than worrying about carving up a depressed purchase market, policymakers should be looking for ways to ensure that creditworthy borrowers have access to homeownership.
Instead of downsizing, banks should reposition big branch networks to protect their ground from nonbanks and tech companies trying to infiltrate the financial services space.
If they get on their high horse, bankers risk coming off as disingenuous. Concentrate instead on developing products that will help consumers meet a specific financial goal.
