There is a paragraph about the history of credit rating agencies that I don't understand
It’s an extremely long-winded way of saying that lending moving from bank lending to bond/money markets. The fact that depositors did not take much direct credit risk is a red herring.
I don’t see the financial logic, but yes, the banking sector moved from being lenders to underwriters of securities.
Bond and money markets are decentralised: instead of a single bank making a loan, there is a group of investors buying a new bond or money market instrument.


The passage is inherently confusing, as it is based on a couple of questionable premises.