funding and equity raisings. these trends have reflected several factors, not least of which has been a shift towards greater financial conservatism by households and businesses. household saving rates have increased, and there has been widespread de - leveraging by businesses. i expect this audience will be interested in the likely environment for lending by banks in the future. the trends i ’ ve just described can be seen ( at least in part ) as responses to the lessons drawn from the crisis – by households and businesses – regarding the dangers of excessive debt. another factor is that the funding environment for banks has been more difficult than it was before the crisis, and this has raised the net cost of financial intermediation. to some extent, these effects might be expected to fade as economic expansion proceeds and confidence in global credit markets improves. nonetheless, when we think about what the post - crisis environment might look like further ahead, it seems unlikely that we ’ ll be going back to the days of consistent double - digit growth in lending that we saw in the pre - crisis years. that growth was driven in part by factors that can ’ t be repeated – the deregulation of the financial system in the 1980s, and the transition to low inflation in the 1990s. there was also a world - wide trend towards greater appetite for risk and leverage. in the post - crisis environment, borrowers and investors are more cautious than they were, both at home and abroad. that ’ s likely to mean less demand for leverage and more reliance on equity funding, even when the economy itself is growing strongly. if those trends continue, i think it will be good for financial stability, but it will also mean that our lending institutions have to get used to lower rates of expansion than were typical in the pre - crisis years. bis central bankers ’ speeches

markets group also maintains close contact with financial market participants in australia and elsewhere, and the reserve bank gains valuable intelligence as a participant in both local and offshore markets. in the lead - up to the board ’ s meeting, all this material is carefully evaluated. at a meeting of the most senior officers in the week preceding the board meeting, discussion occurs about what should be recommended to the board. papers for the board containing the factual information available, the staff ’ s judgements about issues of interpretation in the data, the outlook and any topics of special interest are prepared. a four to five page paper, containing a high - level summation of the issues for policy and the recommendation, is completed on the thursday afternoon ahead of the meeting. board members receive the papers on the friday. at the board meeting, the most senior staff present the key messages from the papers. there is extensive discussion, and plenty of questions from the members about the material. the board, i can assure you, is no rubber stamp and its members are no group of shrinking violets. they come from a diverse set of backgrounds. they bring their own experiences and their own independently gleaned pieces of information about what is going on. the analysis and arguments put by the staff and management of the bank are well and truly tested. any weaknesses will quickly become pretty clear. this discussion usually takes about three hours. it is, i would think, the most intense regular discussion of the state of the economy that occurs anywhere in the country, as of course it should be. at the end of the discussion, the governor, as chairman of the board, will sum up and introduce the policy question. each member has an opportunity to give their view and their reasoning on the decision at hand. typically, a consensus emerges, and the decision is then taken. it then remains to issue a statement. the board meeting is not a drafting session – the members are usually content to leave the precise wording to the chairman, on the understanding that the statement will be consistent with the discussion at the meeting. the statement is then released at 2. 30pm and the community is thereby informed very quickly what the decision is and why we have taken it. subsequently, the draft minutes of the meeting are prepared. these are finalised after members have the opportunity to comment on the draft during the following week, and are released publicly on the tuesday two weeks after the meeting. a few days after this, the whole sequence begins over again. in addition