The evolution of modern financial systems can be traced back to the phenomenon of securitized lending. This process enabled banks to create loans that could be repackaged and sold to investors, thereby providing banks with more liquidity and encouraging them to issue more loans. This cycle of lending, selling, and repurchasing transformed traditional banking practices and played a significant role in shaping contemporary finance.

Additionally, the growth of banks coincided with the development of the bond market, which served as a crucial support structure for the financial system. The bond market provided avenues for investment and capital flow, enhancing the ability of banks to operate within the economic landscape. Together, these two elements—securitized lending and a robust bond market—were instrumental in the advancement of the financial architecture we see today.