But these actions escalate problems of abuse as much as they reduce them (Sandler 1984; Bleakley 1985). They create new forms of collective agency. They increase the physical and social distance in agency relations, further impeding surveillance. They introduce new disabilities of expertise, since the second-order principals who repurchase risky transactions rarely have the particularistic risk-assessment experience possessed by the original. And they diminish the incentives for these first-order principals to enter agency relationships cautiously (so-called lending discipline in banking) because they are able to pass along these unwarranted risks to others (Sandler 1984).

XREF: This connects to modern insight on how securitization and mortgage-backed securities diluted lending standards, anticipating the 2008 financial crisis.

Shapiro, Susan P., The Social Control of Imper…, loc. 38