Appendix 2 — The Credit Intermediation Process of Bank Holding Companies

Appendix 2. A Financial Holding Company’s credit intermediation flows through a chain of subsidiaries and off-balance-sheet vehicles (shadow banks) and is funded in capital markets. This is an originate-to-distribute model of non-conforming mortgages: the originating bank and the broker-dealers that slice loans into ABS and ABS CDOs retain no first-loss pieces. Toggle the sponsor layer to see which entities sit inside the FHC.