##annuation funds, rather than financing the corporate sector directly, have helped finance the banks, which in turn have financed the corporate sector. in effect, we have seen a lengthening of the chain of financial intermediation – from savers to superannuation funds to banks to borrowers. this is not quite the financial disintermediation that some had expected a decade and a half ago. bis central bankers ’ speeches graph 7 superannuation funds have, nevertheless, been an important source of market - based funding through another channel – namely through the purchasing of corporate equity ( graph 8 ). over the past decade, superannuation funds have increased their net investment in australian equities by the equivalent of around 2 per cent of gdp per year, which in current dollars is equal to an annual net new investment of around $ 30 billion. this suggests that there is not a natural reluctance by the superannuation sector for corporate exposure, but rather that equity represents a more attractive option than debt. graph 8 in this context, one issue that is worthy of further analysis is that of liquidity. given that balances in superannuation funds are essentially “ at call ” and can be moved at short notice, these funds need to ensure that they remain quite liquid at all times. this inevitably reduces bis central bankers ’ speeches the attractiveness of relatively illiquid assets like corporate bonds. from one perspective it seems slightly curious that long - term retirement savings can be moved at short notice. over time, there may be a benefit in exploring other arrangements that are more conducive to investments in illiquid assets. does it matter? with these facts as background, i would like to pose the question of whether any of this really matters : does it matter whether or not we have a corporate bond market and does it matter what the size of that market is? after all, the australian economy and financial system have performed well over the past two decades and there does not appear to have been systematic difficulties for the corporate sector in accessing finance. in answering this question it is useful to think about the implications of the corporate bond market for both the overall stability of the economy and for the efficiency of financial intermediation. in terms of stability, one of the arguments for a vibrant corporate bond market is that it can effectively act as a “ spare tyre ” – if the banking system gets into difficulty, the bond market can take its place in providing credit to businesses and thus allow the economy

based capital requirements. the federal reserve and the 2 / 4 bis central bankers'speeches other agencies also raised the threshold for when an appraisal is required for residential real estate loans and tailored safety - and - soundness examinations of community and regional state member banks to reflect the levels of risk present and minimize regulatory burden for banks. these improvements in regulation and supervision have helped right the balance i spoke of earlier between safety and soundness and consumer protection, on the one hand, and the ability to provide financial services and best meet the needs of their customers. we have also considered the impact of our actions, seeking to revise rules that impose significant costs to community banks but provide limited benefit to safety and soundness, consumer protection, or financial stability. as a part of this approach, i have also prioritized efforts to improve the consistency, transparency, and reasonableness of regulation and supervision. one of those efforts is promoting greater consistency in supervisory practices across the federal reserve system. for example, we are actively working to improve the timeliness of providing banks with consumer compliance exam findings. further, we are exploring ways to strengthen our ability to understand, monitor, and analyze the risks that are affecting community banks. a key aspect of consistency is ensuring the same supervisory approach and outcomes for similarly situated institutions, with the goal of ensuring, for example, that a “ one ” composite or component rating in a particular region would be the same for an institution with similar activities and practices in another region. this applies to all areas of our supervisory responsibility, whether safety and soundness, consumer compliance, or analyses of financial stability risk. i ’ d like to expand on one important area of focus, which is essential to the future success of the community banking sector : accessible innovation and technology integration. this subject is one that i speak about frequently with stakeholders and our staff at the board. we are committed to developing a range of tools that will create pathways for banks to develop and pursue potential partnerships with fintech companies. this includes clearer guidance on third - party risk management, a guide on sound due diligence practices, and a paper on fintech - community bank partnerships and related considerations. these tools will serve as a resource for banks looking to innovate through fintech partnerships. technological developments and financial market evolution are quickly escalating competition in the banking industry, and our approach to analyzing the competitive effects of mergers and acquisitions needs to keep pace. the board ’ s framework for banking antitrust analysis hasn ’