The crisis has shown that securitization is heavily dependent on markets’ perceptions and could be subject to sudden bouts of illiquidity generated from investors’ concerns. Namely the consequences of the increased participation in bank funding by financial markets’ investors and the large increases in securitized assets, can led to acute liquidity crises. According to Kane (2010), the pre-crisis bubble in securitization can be traced back to the wrong incentives while Fahri and Tirole (2009) link securitization as a major contributing factor to incentives towards leverage and the building up of systemic risks. .
