60 per cent equity and 40 per cent debt ( graph 1 ). 2 business debt is dominated by loans from financial institutions, with debt securities playing a relatively minor role. this capital structure is similar to most other comparable advanced economies. the united states, to which we are often compared, is actually an outlier. bank loans are a much smaller share of business funding in the us. 1 / 17 bis central bankers'speeches the primary source of new finance for australian businesses is internal funding ( graph 2 ). that is supplemented by funds raised externally. the primary use of funds is for productive investment, such as commercial buildings, machinery, software and other forms of intellectual property. a non - trivial share, though, is used to pay dividends and to purchase financial assets, or for mergers and acquisitions. 3 2 / 17 bis central bankers'speeches it is well established in the literature that businesses prefer to finance investment using internal funds. raising funds externally is more costly and can involve restrictions being imposed on the managers. internal funding is closely related to business investment. they are similar in size. this is evident in graph 3, in which the dots comparing the level of internal funding ( in a given year ) with the level of business investment ( the following year ) are clustered around the 45 degree line. also, there is a clear positive relationship between internal funding and investment. 4 3 / 17 bis central bankers'speeches in contrast, the relationship between external financing and investment is less clear in the aggregate data. external financing is generally much smaller than investment – that is, the external funding dots in graph 3 tend to be well to the left of the 45 degree line. moreover, there is only a weak positive relationship between businesses ’ external funding and investment. 5 debt funding has moved more closely with mergers and acquisitions activity ( graph 4 ). 6 for instance, in the period leading up to the global financial crisis, debt finance was used by a small number of highly leveraged firms to fund several mergers and acquisitions. 4 / 17 bis central bankers'speeches like the growth of external debt, listed equity raisings have been relatively modest over the past 10 years, with relatively little capital raised through initial public offerings ( ipos ) ( graph 5 ). this followed a period of significant equity raisings during the 2000s, partly driven by a number of privatisations through public floats. 5 / 17 bis central bankers'speeches overall, external finance has become more readily available over recent years. monetary policy,

of existence, it is now fully operational, with more than 2, 300 supervisory decisions in 2017 alone. those of you who work within the ssm are the living breathing reality of european integration. every day you prove that closer cooperation, closer union is not a dream of the past but something we are still capable of today. part of the ssm ’ s success stems from its design : the mechanism constitutes an original model of federalism, based on a close and continuous collaboration between the ecb and national authorities at all levels : from the composition of the supervisory board to the joint supervisory teams ( jsts ), the on - site teams and staff secondments. this does not mean that all is rosy and that culture and practices have fully converged within the ssm. success allows us to consider now how the day - to - day functioning of the ssm can still be improved. in my view, there are three main strategic priorities : the first one is to further simplify processes. i welcome the current initiatives, including the creation of the simplification group chaired by petra senkovic from the ecb and edouard fernandez - bollo from the acpr. various measures are under development, like the growing use of delegation, the streamlining of srep or jst functioning. however, an essential challenge will be to make sure that all processes will remain optimised over time and that simplification becomes a full and permanent part of decision - making, from conception to execution. to do so, simplification has to become one of the values that guide the ssm. the second priority is to promote mobility, thanks in particular to staff secondments and more on - site supervisors working on banks outside their home country. other initiatives could include very short staff exchanges or swaps within jsts, between the ecb and national authorities, to allow members to better understand the culture and practices of their 2 / 3 bis central bankers'speeches counterparts. the third and final priority is to develop synergies. just as with the eurosystem, the banking union constitutes a system with a strong center and strong national components, which ultimately have to act as one team. the goal is to make the best use of national resources by fostering their participation in all key tasks of the ssm. national authorities should not hesitate to step up their involvement in the ssm. in return, the ecb should further empower national authorities, especially in the framework of day - to - day