The old 3-6-3 model presumed that the bank that issued a loan to a customer held the loan until it was paid off, with profits accruing from the interest payments it received. But what if these loan payments could be separated out and sold on to someone else? What if many such loans, mortgages for example, could be bundled together as a pool of mortgage payments and sold to investors as an income-generating contract called a mortgage-backed security? That way, the bank that issued the loan could borrow cheaper and make more loans because the risk of the loan not being paid back was no longer on its books, and the borrower would get better rates.

Mark Blyth, Austerity, loc. 79