Dr. Martha O'Hagan-Luff:

Securitisation can happen with performing as well as non-performing loans. I certainly would have taught that securitised mortgage products were not a bad product initially when introduced in the US. The turning point was when sub-prime mortgages were introduced and financial institutions tried to slice them and achieve a triple A tranche at the top. The securitisation model is not a bad idea in and of itself. It allows banks to originate mortgages and securitise them which frees up their balance sheets to allow the banks to continue to lend. There is obviously a risk in the context of a duty of care and consumer protection. The question arises as to who owns the loans. If they are securitised, they are sold on and they may be resold multiple times. That is the problem to which the Deputy is referring.