3.2 Our analysis in Part Two has shown the increase in the cost of using private finance compared with before the credit crisis. This increased cost may not be a temporary phenomenon, because one of the primary effects of the credit crisis may have been to change the attitudes to corporate and project risk within banks. As a result, there may have been a long-term increase in the cost of using private finance.
3.3 In addition, a significant problem for banks at the peak of the credit crisis was the mismatch between long-term loans (their assets) funded by short-term borrowing (their liabilities). So although PFI projects are underpinned by revenue from public funds, the combination of long-term loans and remaining risk transfer may have permanently increased finance costs and reduced the number of participants willing to lend in this market.