speeches the general decline in borrowing costs in the second half of 2012 has helped entice a number of issuers back to the wholesale market, with volumes picking up across all markets towards the end of last year and into the first quarter of 2013 ( graph 5 ). in the unsecured market, banks continue to keep their stock of term debt relatively constant, that is, issuance is broadly in line with maturities. this strategy is the result of a number of different considerations, including the relatively subdued growth in balance sheets. but one dominant cause is the desire to maintain a strong rating, with the latent threat of a downgrade if wholesale issuance were to grow “ too large ”. this reflects the somewhat misplaced assessment of “ deposits good, wholesale funding bad ”. as a result, banks are currently paying about the same price for a 3 - month term deposit as they are for a 5 - year debt issue. banks have taken advantage of the increase in risk appetite by lengthening the tenor of their issuance. the average tenor of unsecured issuance has been 5 years since the middle of last year, compared with a little over 4 years since the beginning of the financial crisis. increasing tenor has also been a feature of other markets. for example, the australian office of financial management ( aofm ) extended the average tenor of cgs issuance in 2011 / 12 by over a year to 7. 7 years, 3 while over the past 12 months the tenor of corporate issuance has increased to nearly 11 years, compared with an average of 8 years since the beginning of the financial crisis. the securitisation market has only recently caught up to these trends, lagging behind most other segments of the debt market. issuance has picked up of late and spreads have tightened considerably following the earlier sizeable tightening in covered bond spreads. encouragingly, recent issuance has been completed with little or no support from the aofm due to strong private investor demand, and primary market spreads are at their tightest level since 2007 ( graph 6 ). this spread tightening will lower the cost of mortgage lending for small banks and non - bank lenders who rely on securitisation for a large part of their funding. graph 6 see aofm ( 2012 ), australian office of financial management annual report 2011 – 12. available at < http : / / www. aofm. gov. au / content / publications / reports / annualreports / 2011 - 2012 /

be indirect, operating through investment intermediaries of various types. that means the beneficial owners of shares – individuals – tend to have little direct communication with, involvement in, or indeed knowledge of, the firms in which they are investing. one consequence of a more dispersed and disinterested ownership structure is that it becomes harder to exert influence over management, increasing the risk of sub - optimal decision - making. 17 there is some empirical support for this hypothesis. for example, companies tend to have higher valuations when institutional shareholders are a large share of cashflow, perhaps reflecting their stewardship role in protecting the firm from excessive risk - taking ( la porta et al ( 2002 ), claessens et al ( 2002 ) ). ( c ) short - termism a third friction in the manager / shareholder relationship, distinct but related, arises when different classes of shareholder have different rates of time preference. in particular, there have been concerns about the rising share of investors with excessively high discount rates and low holding periods – in other words, about “ short - termism ” ( kay ( 2012 ) ). there is clear evidence of the investor scales having rebalanced in this direction over time. average holding periods of shares have been in secular decline in a large number of countries for a number of decades ( chart 1 ). in the uk and us, they have fallen from around 6 years in 1950 to less than 6 months today. 18 another diagnostic on short - termism is found by looking at company pay - out behaviour. chart 2 compares dividend pay - out behaviour among companies during two eras – the mid19th century period before shareholder primacy took hold, and the period since 1980 when it has been uppermost in the minds of management ( haldane ( 2010 ) ). haldane ( 2011 ). recognition of this problem lay at the heart of john kay ’ s proposals, in his review, for an “ investor forum ”. this was a mechanism for bringing together in particular institutional investors to mobilise and strengthen their hand ( kay ( 2012 ) ). see haldane ( 2010 ). within this, the move to high frequency trading has contributed to a downwards shift in this average holding period. bis central bankers ’ speeches in the earlier period, dividends decreased as often as they increased. this is as we would expect if profits fluctuate both up and down. after 1980, however, we see a one - way street.