But in July 2004, as subprime was really hitting its stride, the regulators agreed to provide a permanent exemption that effectively allowed assets held in SIVs to be backed by only 10 percent of the capital that would have been required if the assets were held on the balance sheets of the banks themselves. This was particularly attractive for big commercial banks, like Citigroup and Bank of America, that were subject to relatively tight capital regulation, putting them at a huge disadvantage to the lightly regulated investment banks. It was following that regulatory shift that the ABCP market
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