Please discuss the impact on local bank behavior of this


As recently as a decade or two ago banks and other consumer based financial institution like credit unions and S & L's made the majority of their profits on the interest income of the financial products that they sold. Their focus therefore was local or regional and they had a very vested interest in the health of the local and regional economy. With the advent of financial market deregulation and the securitization of the loan portfolio's from these institutions the future interest income was sold and this changed the focus of profits from interest income to fee generation. Please discuss the impact on local bank behavior of this change and how this contributed to the financial meltdown in 2007 - 2008 and its aftermath.

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Finance Basics: Please discuss the impact on local bank behavior of this
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