The share of these assets is about four times its pre-crisis level. Compared with other economies, lending and borrowing in the United States depend less on bank loans and more on funds flowing through a wide array of capital market channels. The crisis revealed that this capital market centric system, despite its many benefits, also provides more places where systemic risks can emerge.
Let me first stress once again, however, that we – like the IMF, BIS and other central banks – had basically long been expecting a correction of risk premiums, which had been strikingly low for some time.