Professor Philip Lane:

The good news, as the Deputy indicated, is that so many agencies are looking at this now. It is not a gigantic part of the whole financial system, although nor was sub-prime back then, so it is very important that we all study this. The Financial Stability Board has announced a new product on it. There is a great deal of interesting material - I will turn to Mr. Sibley in a moment - but one basic point is that some of the lessons have been learned. For instance, one of the vicious spiral dynamics in 2007 was various types of loans being funded very short term. For many of those leveraged loans the funding line is significantly longer in maturity. The issue of a panic leading to the death of these entities very quickly does not arise.

There are plenty of reasons for us to look at this because it has been growing quite a bit. Perhaps Mr. Sibley can say something on this.