asset - backed issuance, such as residential mortgage backed securities ( rmbs ), where the bank sells a security backed by a pool of assets to the market. the assets are no longer present on the bank ’ s books after the sale. 5. covered bonds, where the issuance is again backed by a pool of assets. however, in this case, the assets remain on the balance sheet of the issuing bank, and the investor is given an additional claim on the balance sheet of the bank. note that the first three forms of funding are claims on the bank ’ s balance sheet as a whole. in the case of deposits, in many countries, insurance or guarantees provide protection up to some level but any deposit larger than that is a form of unsecured funding. asset - backed issuance is obviously secured issuance, while covered bonds are primarily secured issuance but with an element of unsecured funding in terms of the recourse to the balance sheet as a whole. today i will focus primarily on the last three modes of funding, generally characterised as wholesale funding. first i will summarise developments in bank funding in australia, the us, bis central bankers ’ speeches europe and uk since the financial crisis began over four years ago. central bank actions in each of these areas have had implications for bank funding, so i will then spend a little time discussing this issue. finally i will pose some questions about how wholesale funding might evolve in the future, focussing particularly on the sustainability and desirability of the current investor preference for secured issuance. present graphs 1 to 4 show the patterns of bank wholesale funding over the past five years in the us, uk, europe and australia, using the taxonomy described above. 1 the one additional source of wholesale funding ( not described above ) is government - guaranteed bond issuance for the period from september 2008 until the cessation of the guarantee on new issuance. in every case bar australia, it is noteworthy that the level of wholesale issuance in 2011 is substantially below that in 2007. to a large extent, this reflects the fact that outside australia, credit growth has been very low or even negative for much of this period ( graph 5 below ). the other important factor, mentioned earlier, is the relatively strong growth in deposits in all four regions. this trend is well documented for the us, europe and the uk in a graph from a recent paper published by some of my colleagues on the committee on the global financial system.

have been shut out of unsecured markets, particularly since the middle of this year. the composition of secured funding has changed dramatically, with covered issuance accounting for the vast bulk of secured issuance in 2011, compared with a roughly equal split in 2007. the covered market has been the primary funding source for those institutions unable to tap unsecured markets. but the secured issuance data are also significantly affected by “ self - securitised ” issues, both mbs and covered, which are retained on the balance sheet of european financial institutions to access liquidity at the ecb ( see below ). 3 finally, the aggregate figures for europe mask some quite significant differences across countries and institutions with, for example, secured issuance by german institutions almost entirely in the form of covered bonds ( pfandbriefe ) while banks in the netherlands issue rmbs. graph 2 in the uk, the share of unsecured issuance in total issuance is about the same in 2011 as it was in 2007, at just over 50 per cent. however, total unsecured issuance is significantly smaller in 2011 than in 2007. the share of funding from mbs has declined but has been fully compensated for by an increase in the share of covered bond issuance. note that part of this for more detail, see “ recent developments in securitisation ”, european central bank, february 2011. bis central bankers ’ speeches shift reflects a compositional shift in the industry. entities such as northern rock, which sourced a large share of their funding from mbs, were a large part of the market in 2007 but are obviously not so today. a final point on the uk data : the large amount of mbs in 2008 predominantly reflects “ self - securitised ” issuance in order to access the special liquidity scheme ( sls ) at the bank of england ; more on which shortly. graph 3 in australia, the share of unsecured funding has actually increased between 2007 and 2011, in contrast to the other regions. in large part this reflects a compositional effect. a number of institutions, some banks but particularly non - banks, were significantly more reliant on mbs for their funding than the larger banks. following the dislocation in the mbs market, the larger banks now account for a much larger share of the financial sector in 2011 than they did in 2007. graph 4 obviously in australia, the covered bond market is in its infancy, with