As well as work to encourage long-term, stable funding from the financial system, we are also improving our understanding of how access to finance affects businesses’ investment decisions. To that end, the Bank is launching a survey of business finance and investment decisions, building on the 2017 survey I mentioned earlier. Please engage with it. [5]  Conclusion UK corporates have faced huge challenges in recent years. The FPC continues to monitor their financial health with an eye on both lender and borrower resilience. At the same time, the FPC is doing its part to make sure the financial system can support longterm productive investment with long-term, stable funding. And we are working to identify where the financial system may need to do more to support business investment. These are ongoing endeavours, but there has been concrete progress already. In both cases we will aim for a stable financial system that absorbs rather than adds to shocks, and supports business investment and economic growth. An investment in financial stability to provide solid support for UK businesses through both challenges now and uncertainties as we look further ahead. I’d like to thank Jelle Barkema and Benjamin King for their assistance in drafting these remarks. I would also like to thank Laura Achiro, Kim Nyamushonongora, Richard Button, Sarah Venables, Martin Arrowsmith, Geoff Coppins, Jon Cunliffe, Renée Horrell, Sudipto Karmakar, Christiane Kneer, Iren Levina, Harsh Mehta, Tabitha Rendall, Nyssa Roberts, Matthew Waldron and Danny Walker for their helpful input and comments.

More broadly, the FPC has judged the UK banking system to be resilient and “well placed to continue supporting the economy in a wide range of economic scenarios, including in a period of higher interest rates.” And so while there are clearly lessons to be learned from this episode, I  Page 8  think experience in the UK shows the benefits, including to corporates, of our post-GFC banking reforms. Banks are not the only providers of finance to the real economy. UK corporates, particularly large ones, have become increasingly dependent on financial markets as a source of lending. Indeed, market-based finance as a share of aggregate corporate debt has increased from 40% in 2009 to over 50% in 2022, accounting for nearly all of the increase in net lending since 2007. In theory, the availability of market-based finance helps mitigate credit supply disruptions, as the existence of a strong market channel avoids over-reliance on bank funding. In addition, some market-based investors have long-term investment horizons and may be well placed to look through short-term dynamics. [3] But increased dependence on market-based finance leaves UK corporates exposed to new shocks, especially in riskier market segments, like high-yield bond, leveraged lending, or private credit markets. Globally, these markets have almost doubled in size over the past decade. A sudden or disproportionate reduction in investor appetite for these assets, in combination with forced sales and sharp falls in asset prices, could impact UK firms’ ability to access funding, potentially forcing some companies to delever or even default.