this direction over recent times. these steps include : efforts to simplify prospectus requirements for retail vanilla bonds and ease the personal liability of company directors ; improving market transparency through the rba ’ s publication of new measures of corporate bond yields ; the lengthening of the government bond curve ; and the listing of certain fixed - income securities on the australian securities exchange. these are all welcome developments. conclusion in conclusion, let me try to briefly summarise. bank - based finance remains the dominant form of finance for australian companies. superannuation funds have been prepared to finance banks and have effectively outsourced the credit assessment function for much of the corporate sector. partly as a result, the development of a deep and liquid corporate bond market is still a work in progress. but an equally important observation is that we do have the infrastructure that could support a strong and very active bond market in times of stress or inadequate competition. in this way, this infrastructure provides a form of insurance. we need to make sure that we nurture this infrastructure so that we can continue to be confident that the corporate bond market will be there when it is most needed. given this perspective, i think it is probably better to think of markets and institutions as being complements, rather than as being engaged in some type of struggle for supremacy. thank you very much for listening. bis central bankers ’ speeches

rapidly, with most business borrowers still connecting with savers over the balance sheets of financial institutions. some of these commentators have also lamented the fact that superannuation funds – who they see as a natural buyer of corporate bonds – seem to have had only a limited appetite for these bonds. see financial system inquiry ( 1997 ), financial system inquiry final report ( s wallis, chairperson ), australian government publishing service, canberra, p 159. bis central bankers ’ speeches given this background, i thought it would be useful to briefly discuss recent developments in the australian non - financial corporate bond market as well as the role that superannuation funds have come to play in intermediating between borrowers and savers. i would then like to discuss the role that market - based corporate financing can play in providing a form of insurance against stresses in the banking system and the possibility of a lack of competition in the banking system. the australian corporate bond market by international standards, the australian corporate sector makes relatively little use of the bond market, especially the domestic bond market. since the mid 2000s, the available internationally comparable data suggest that average annual bond issuance by australian corporations has been the equivalent of just under 1 per cent of gdp, with around two - thirds of total issuance taking place offshore, rather than in the domestic market ( graph 1 ). in most other countries with which we normally like to compare our financial markets, the corporate sector makes greater use of bond funding. graph 1 the relatively high reliance of australian issuers on the offshore market is evident in the data on the composition of corporate bonds outstanding ( graph 2 ). currently, bonds that were issued offshore account for around 80 per cent of the outstanding value of bonds issued by australian - based corporations. a decade ago, this figure was considerably lower at around 50 per cent. the offshore market is favoured by companies that want to raise foreign currency funding as a natural hedge against their foreign currency revenue. it has also proven easier to issue large amounts and at longer tenors in the offshore market than it has in the domestic market. bis central bankers ’ speeches graph 2 another perspective on recent trends can be gained from looking at the data on the number and credit ratings of the individual bonds that have been issued domestically and offshore ( graph 3 ). graph 3 bis central bankers ’ speeches a number of observations stand out : 1. the number of australian companies issuing bonds is quite small. on average, over recent times, only around 30 bonds have been issued in