To understand this, let us break down the essence of financial intermediation – between savers in an economy (basically households) and borrowers. The core part of this financial intermediation is done by banks – through accepting deposits, extending credit and enabling payments. Since virtually all money (other than currency) is held as bank deposits, banks are at the centre of the payments system.
This would be a positive sign of health in the financial system but also raise a concern about the government bond market in view of the record issuance requirements. Secondary markets The secondary market has been more permanently hit by the crisis than primary markets.