More broadly, the corporate bond market can improve the overall efficiency of the financial system through offering a broader range of maturities and loan structures than banks are able, or willing, to do. 4  See for example Gambacorta L, Y Jing and K Tsatsaronis (2014), “Financial Structure and Growth” BIS Quarterly Review, March, pp 21–35. Available at <https://www.bis.org/publ/qtrpdf/r_qt1403e.htm>.
8  BIS central bankers’ speeches  Graph 9  So, in effect, the bond market can be seen as providing a form of insurance – insuring that in times of banking system stress the process of financial intermediation can continue and, at other times, insuring that any lack of competition in the banking sector does not lead to excessively high prices for financial intermediation.