Virtually all of the net credit growth since then has been from the bond markets. In tandem, the assets under management have risen by 60% globally and 80% in the EU. These trends will continue as the Capital Markets Union is developed. The ESRB is currently contributing in two ways to more resilient capital markets. First, it is promoting a shared understanding of the fundamental drivers of market liquidity. Second, it is gathering consistent information on the nature and size of the risks associated with market-based finance. The ESRB has unique powers in this regard given its ability to collect information from financial participants from across the EU.1 The ESRB is currently surveying market makers and asset managers as part of a broader study into the risks from a reduction in market liquidity. This work should be completed by mid-2016. The survey will draw out the implications for liquidity conditions, including whether openended funds have liquidity sufficient to meet redemptions in the event of market stress. 1  2  Of course, the ESRB must exercise this power with care and precision. And the case for doing so must be compelling. But the rapid growth of market-based finance satisfies these tests. BIS central bankers’ speeches  In a similar survey of 143 investment funds, the Bank of England found that, in aggregate, these funds expected to be able to liquidate in one day roughly three times estimated dollar corporate bond market turnover; clearly a fallacy of composition. The ESRB survey will provide a valuable wider perspective.

But greater competition is absolutely necessary to stimulate financial innovation. In addition, it translates in a market structure that is more attractive from a financial stability perspective and easier to oversee from a supervisory standpoint. So, to conclude my second point, the completion of the regulatory decade to strengthen banking financial intermediation is not the end of the story; it’s just the end of the beginning. The transformation of financial intermediation is full of opportunities but it also highlights the limitations of sectoral and entity-based regulations and the need to adapt regulation and supervision to a morphing financial intermediation. To manage the financial stability risks stemming from an unbundled financial intermediation model, what we need is to develop: -  First, well-articulated and complementary regulation and supervision going from microprudential to macro-prudential, from prudential to consumer protection, anti-money laundering, data protection and anti-trust laws;  -  Secondly, a technology-neutral stance, which accommodates Fintech innovation while preserving financial stability; and  -  Thirdly, an activity-based regulation and supervision, to ensure a level playing field between all entities pursuing the same financial activity. 3- The need to advance the European regulatory agenda to support a more diversified and integrated intermediation model All these new trends in financial intermediation – digitalisation, non-bank financial intermediation, Brexit – plead for advancing the European agenda to support a more diversified and integrated intermediation model. At the same time, these changes represent an incredible opportunity to restructure the European financial system in order to unleash growth and innovation.