The system of non-deposit taking financial intermediaries including investment banks, hedge funds, monoline insurance firms and other securities operators that grew up complementing the traditional banking system during the property boom between 2001 and 2008, particularly in the US.

All operated in different parts of the securitisation business where mortgage loans were packaged as securities, moved off bank balance sheets and distributed, via various investment vehicles, to an array of investors.

Example

The securitisation activity fuelled the residential mortgage lending boom that in turn boosted property prices up to mid-2007 until the onset of the sub-prime crisis and the subsequent banking crisis. [1]