It is unfortunate that since the onset of the financial crisis, the Originate-To-Distribute (OTD) market which is the biggest market player in terms of practices dealing with securitizing mortgages; has been dysfunctional and has not been in use since then. (Bernanke, 2009). In reality, such a measure which puts the investors at risk by transferring the banks’ risk to them while at the same time allowing banks to replenish their funds has been abandoned temporarily. However, the OTD market may not be closed for ever because there still is demand for liquidity of funds and transfer of risk. Thus, the only way forward is to discuss how balance between crisis prevention and operational requirement of commercial banks can be attained.

Finally, there ought to be a discussion on mortgage securitization practices. This is assumed to have the overall effect of reducing possible threats that may be associated with mortgage securitization. There is a dilemma of whether to ban the OTD market or to modify it? It is obvious that imposing a ban cannot meet the demand for liquidity and risk transfer of commercial banks, meanwhile as the crisis looms, loss of investors was brought about by subprime mortgage securitization therefore, keeping subprime mortgage away from the OTD market is recommended in order to ensure that liquidity and risk transfer of banks and assets are safe for investors.

To curb such problems related to bank risk management, there is need for an independent monitoring department which should be assigned to take care of mortgage security. In addition, the banks can put in place two methods to help prevent an OTD market from being a threat to investors. The two methods may include; entirely abandoning the OTD markets for instance through mobilizing the Central Bank to establish a ban on OTD markets and mortgage securitization practices. The second option is that of modifying the OTD market rules or probably enhancing the threshold and requirement of it. For instance, an independent special department can be set up under the leadership of central bank or authority to monitor the OTD market and only approved mortgage which can be transferred to the investors in OTD market.

Moreover, there have been attempts of enhancing the requirements for the mortgage pre-investigation and tracking through setting up of a special department for monitoring the OTD market and restraining issuance of loans to subprime borrowers. However, this essay does not put into consideration some special circumstances in specific countries or region which could also hinder the exercise, some measures may not be adopted by those banks. Never the less, this essay lacks information on anti-risk measures that influence bank profits. There is need for bankers to consider the balance of profitability and risk management, while combining specific situations of their banks.

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