Let's take a look at what's changed in the syndication market. Over the last 10 years volatility has increased substantially increasing the risk that the syndication process may fail. The main reason for this was the financial crisis, which has produced a significant reshaping of the market. Furthermore, the banks faced much greater regulatory requirements. This led to the same amount of loans needing more equity to fund them. This has reduced the bank's capacity and make banks much less competitive compared to, say the bond market in financing structures. In particular, the ability of the banks to make long-term loans has been significantly reduced.

One of the main causes of this regulatory change is the net stable funding ratio, which requires banks to look at their balance sheet and manage the maturity of the assets and liabilities, and broadly makes sure the duration matches.

This makes it very difficult for a bank that is funding itself by deposits to make long-term loans. As a consequence of these changes, a lot of additional funding has come from non-bank players, such as pension funds. This has expanded the potential actors in the syndication process. The banks themselves will arrange the deal due diligence and pricing. They'll then draw in other investors, such as insurance companies to provide the funding. So let's take a brief look at some of the key changes in capital requirements for the banks. This primarily comes from the changes since the financial crisis. First tier one capital, which is broadly shelled as equity, has been tightened up. So you can't have quasi tier one. It's pretty much shelled as equity only. Secondly, the amount of shareholder equity for each dollar of loan has increased. That has meant that for the same amount of equity, you can lend less. As a bank, you also need buffers for potential loan losses in the future. And these are known as capital conservation buffers. A counter cyclical buffer is where the regulators can increase the capital requirements beause they think the loan market is overheated. Also, if you're a very large institution, you have additional requirements. One of these requirements is a too big to fail charge for very, very, very large institutions.

Leverage ratios have also been introduced based on a simple calculation of assets versus equity. This is partly due to the fact regulators were slightly nervous about the ability of banks to correctly risk manage their assets, risk weight. The liquidity coverage ratio just tests whether the bank has enough liquidity to meet its short-term obligations. And the net stable funding ratio we've just mentioned, and this is where the bank is having to manage the maturity of assets versus liabilities. So the overall issue here is that regulation has increased dramatically, and this has made it much more difficult for banks to be competitive in the syndicated loans market.