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Nor is it by any means certain to happen, despite the advantages of a rationalised system greater efficiency and lower requirements for collateral from its users.
Lenders were also throwing cheap money at other borrowers, such as corporations, with loose requirements for collateral or other repayment guarantees, he adds.
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As has been the case, credit to purchase capital is made available by financial institutions ONLY to people who already own capital and other forms of equity, such as the equity in their home that can be pledged as loan security -- those who meet the universal requirement for collateral.
Modern conflicts are increasingly characterised by asymmetric urban warfare, with improvised explosive devices (IEDs) often playing a dominant role on the one hand and an armed forces requirement for minimal collateral effects from their weapons on the other.
Finally, surety bonds are often issued with the requirement of collateral, whereas fidelity bonds are not.
Without one, they argue, increased collateral requirements for cleared trades would make hedging their everyday risks much more expensive.
Mathew Dunn, a lobbyist for the National Marine Manufacturers Association, said collateral requirements for loans to recreational boat dealers are higher than those for securities backed by car loans.
Because the bank tightened collateral requirements for some other kinds of securities, the net effect on lending will probably be small initially.
Mr Greenspan reckons the best remedy is to improve the system's capacity to absorb losses by raising banks' capital and liquidity ratios and increasing collateral requirements for traded financial products.So far, so uncontroversial.
Debt financing includes, therefore, the secured loans which involve the collateral requirements for securing bank financing.
It also makes sense for regulators to continue toughening collateral and capital requirements for derivatives, including credit-default swaps.
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