Recycled tranches fuel lending booms

When structured‑finance vehicles repeatedly repackage lower‑quality slices (tranches) of asset pools, they can create a feedback loop that increases lenders' willingness to originate poor‑quality loans because those risks are dispersed or transformed downstream. Over time the repackaging conceals true risk concentration and magnifies systemic vulnerability. — Highlights a mechanism — securitization of securitized slices — by which financial innovation can create moral hazard and systemic crises, informing regulation, bank oversight, and housing policy.