Rather, they package them and sell them to other intermediaries that in turn securitize the collection of mortgage loans and resell them, often to investors in Asia and Europe.
ASIC has been called out for its ineffectiveness since the early 1990s, complains Allan Fels, a former chairman of the competition commission. What's different now?
A 2011 survey by Coller Capital, a private-equity investor, found that half the industry's backers have at least one zombie-run fund in their portfolio.
And then you also have any bank which has more longer-dated securities investments that they've made around, you know, longer-dated US treasuries and things like that.
Vision Capital, based in London, specialises in buying entire portfolios of companies previously owned by private-equity firms, thereby taking over the assets of a zombie fund.
The failure of Washington Mutual, a bank, in 2008 deprived FHLB Seattle of its largest customer and compounded bad investments in mortgage-backed securities.