William Dudley, the president of the Federal Reserve Bank of New York, predicted the securitization market will shrink.

“The demise of parts of the shadow banking system such as the … [structured investment vehicles] and the fact that banks are likely to have to consolidate some off-balance activities back on to their books at the end of this year should reduce the overall demand for and supply of securitized product,” Dudley said in a speech at a Securities Industry and Financial Markets Association conference.

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