Large banks subject to liquidity regulation are less reliant on unstable short-term wholesale funding and have thicker liquidity buffers. Money market reforms have also reduced funding risks. A range of asset prices remain high relative to historical benchmarks, even with the recent financial market volatility.
In particular, yields on high-yield corporate bonds relative to Treasury securities remain somewhat narrow on a historical basis despite recent increases. Similarly, although they have moved up in recent months, spreads on leveraged loans remain in the bottom half of their range since the financial crisis, which is notable given the evidence of weakening protections.