this issue, we must go beyond today ’ s dodd - frank. we must confine the use of the safety net to its original intent. we must reduce the artificial complexity of existing financial structures. the rewards of success must be balanced against the credible consequences of failure. in achieving such goals, we will enhance the stability of the fundamental mechanism through which monetary policy is conducted and the economy depends. the decline in competition and accountability in banking the u. s. economy is the most successful in the history of the world. it achieved this success because it is based on the rules of capitalism, in which private ownership dominates markets and individuals reap the rewards of their success. however, for capitalism to work, businesses, including financial firms, must be allowed, or compelled, to compete freely and bis central bankers ’ speeches openly and must be held accountable for their failures. only under these conditions do markets objectively allocate credit to those businesses that provide the highest value. for most of our history, the united states held fast to these rules of capitalism. it maintained a relatively open banking and financial system with thousands of banks from small community banks to large global players that allocated credit under this system. as late as 1980, the u. s. banking industry was relatively unconcentrated, with 14, 000 commercial banks and the assets of the five largest amounting to 29 percent of total banking organization assets and 14 percent of gdp. today, we have a far more concentrated and less competitive banking system. there are fewer banks operating across the country, and the five largest institutions control more than half of the industry ’ s assets, which is equal to almost 60 percent of gdp. the largest 20 institutions control 80 percent of the industry ’ s assets, which amounts to about 86 percent of gdp. here ’ s the irony : this marked increase in concentrated power, and therefore, more concentrated risk, reflects past efforts to assure greater economic stability. this might best be described as “ good intentions / bad outcomes ” syndrome. for example, the federal reserve was founded following the 1907 banking panic and was charged with providing liquidity support to solvent banks that were experiencing funding problems. after the great depression, the federal deposit insurance corp. was created to provide limited deposit insurance to protect small depositors and to further increase the resiliency of the financial system. then, over the past 30 years, this safety net has expanded far beyond its original intent. more recently, glass - steagall was repealed, giving

grade corporate issuers relative to treasury securities increased by about 2. 5 percentage points in the first half of march, while issuance for companies rated below investment grade came to a halt. in this context, the primary market corporate credit facility ( pmccf ) was designed to provide funding for highly rated companies that need access to financing in order to maintain business operations during this period of dislocation. again with backing from the u. s. treasury, the federal reserve will create a funding vehicle to backstop eligible corporate borrowers for up to four years, at an interest rate that is better aligned with corporates ’ underlying credit risk than was available through market - based financing during march. this funding can be provided by the pmccf either through purchases of eligible corporate bonds as the sole investor at issuance, or from purchases of portions of syndications at issuance. the secondary market corporate credit facility ( smccf ), also backed by the u. s. treasury with funding from the federal reserve, will play an important complementary role to the pmccf. here again, there will be two mechanisms at work : the smccf may either purchase eligible corporate bonds with a remaining maturity of 5 years or less, or it can purchase u. s. - listed etfs. for etfs, the preponderance of holdings will be of etfs whose primary investment objective is exposure to u. s. investment - grade corporate bonds, and the remainder will be in etfs whose primary investment objective is exposure to u. s. high - yield corporate bonds. taken together, the corporate credit facilities will have three main objectives when we go live in the coming weeks : first, to provide broad support for market functioning in secondary markets to allow for orderly and timely risk transfer in corporate credit ; second, to support primary issuance for businesses at funding costs that better reflect normal liquidity conditions ; and third, to reduce the incidence and severity of fire sales and / or indiscriminate liquidation. municipal liquidity facility the last facility i ’ ll mention today is the municipal liquidity facility, which was designed to help 2 / 4 bis central bankers'speeches provide states, cities and counties with the funding needed to provide essential public services to their citizens. due to the virus outbreak, the municipal securities market has recently been under considerable strain as investors have become reluctant to purchase municipal securities. as a result, interest rates on municipal securities have increased significantly. at the same time, states