Big banks have found a new way to stay in the subprime lending business

Big banks have found a new way to stay in the subprime lending business
  • Despite tough new regulations aimed at lowering risk for banks, Wall Street continues to find a way to finance subprime loans.
  • Instead of direct lending, big institutions like Wells Fargo and Citigroup loan money to nonbank institutions — shadow banks — who then deal with higher-risk clients.
  • Banks say this way helps lower their exposure.
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