I would like to start with a quote from the final report of the previous inquiry into our financial system – the Wallis Inquiry which handed down its findings 17 years ago. In particular, the report observed:1 The evolution of financial systems has been characterised by a continuing struggle between financial intermediaries and financial markets.
While the inquiry was wary about making precise predictions, there was quite a strong sense in the report that financial markets would inevitably win this struggle; that over time, markets – including the bond market – would become increasingly important in connecting savers to borrowers.