•  "The great moderation", lower volatility of output and inflation, has played an important role in reducing risk premia, in particular inflation risk premium. Central banks have clearly contributed to this by credibly anchoring inflation expectations.
Changes in intermediation roles certainly raise potential challenges, though they may be alleviated somewhat by reputation and other market-based factors. The increased specialization of some commercial banks as originators and distributors – and less as long-term owners – of some loans may have lessened their incentives to screen borrowers, and to write and monitor loan covenants.