Despite the collapse of securitization markets during the financial crisis, an originate-to-distribute model of mortgage lending will not fade away once the turmoil subsides, Dennis Lockhart, the president of the Federal Reserve Bank of Atlanta, said Thursday.

"This form of financial intermediation developed in response to needs and realities that have not disappeared," he said during a speech to the Levy Economics Institute at Bard College. "Securitization has brought benefits to consumers that cannot be easily matched by a bank that originates a loan to hold."

Securitization has helped reduce mortgage rates and increase the percentage of Americans who are homeowners, he said. But he acknowledged that securitization helped lead to complex collateralized debt obligations and other financial tools that fueled the credit crisis.

"Going forward, markets and investors will show a new awareness of the potential for complexity, opacity, and risk in securitized instruments," he said. "This awareness, in and of itself, has and will continue to provide incentives for the creation of simpler and more transparent securitization structures."

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