If nobody can sell mortgage-backed securities based on trillions of dollars of unpayable instruments, there's a lot less risk in the overall system.
Interpretation
Elizabeth Warren suggests that reducing the ability to sell unpayable mortgage-backed securities decreases the overall risk in the financial system.
Elizabeth Warren highlights a critical issue in the financial sector, where the widespread sale of mortgage-backed securities composed of unpayable debts poses a significant risk to the economic system. By eliminating or restricting the trade of these financial instruments, the overall stability and security of the financial system can be improved, thereby protecting investors and the economy from potential crises.
In practice
This quote can be used in a finance class to discuss the importance of risk management.
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