their own natural equity providers. this brings me to the last part of the story, namely the growth of non - bank asset management in its broadest sense as the size of bank balance sheets has tended to reduce post - crisis. it is striking that if you were familiar only with a chart of the evolution of global assets under management over the last twenty years, you should be excused for failing to spot that a global financial crisis had occurred. it follows from what i have said that this shift from banks to non - banks makes sense as we seek to achieve a clearer demarcation of the types of liability or funding contracts and the assets best suited to go with them. but it only makes sense if a few conditions are met, two in particular. first, that there is no lack of clarity about the nature of the assets held under management. thus the label on the can is an accurate description. take as an example the recent failure in the us of the third avenue focused credit fund ( focused on what a comedian might say ). the purpose of the fund was to invest in high yield debt. the label seems to have made that clear, and it wasn ’ t therefore in the form of a aaa label which obscured the reality. the failure of this fund has not made major ripples all on its own. why? i would argue because there was no obvious lack of clarity around the assets, and this is a reminder against the re - appearance of opaque instruments and complex tranching. the second condition to meet is that there is no illusion about the liquidity of the assets. it is critical that investor expectations are well adjusted to the prevailing liquidity conditions. a lot of work is under way to assess the market liquidity implications of the expansion of assets under management, and this is important for our remit in financial stability. an important part of this work is to do all we can to ensure that investors understand the characteristics of the assets they hold, and that the liquidity promised by funds to their investors mirrors the market liquidity of the underlying investments. conclusion in conclusion, the objective of the financial reform programme is clearly not to return to the unstable pre - crisis years, however attractive some of the statistics of that period look in isolation. the response has been to strengthen the loss absorbency of the banking system but also to enable greater clarity between the different forms of bank liabilities consistent with the economic terms of the contracts. this may seem like dry balance sheet stuff but the benefits are major

and elsewhere, such as consumer lending. 4 i will focus on property markets. buy - to - let first and foremost, within the residential property market, lending for buy - to - let has been growing strongly for a number of years. the stock of buy - to - let mortgage lending has grown at an annual average rate of 6 % since 2008. it rose by 11. 5 % in the year to 2015 q4, while the stock of lending to owner occupiers was unchanged. buy - to - let mortgages now account for 17 %, by value, of the total stock of secured lending. lending for buy - to - let has clearly been profitable. at around the start of 2016, lenders were planning to grow their gross buy - to - let lending by, on average, almost 20 % per annum over the next two years, with some challenger banks and smaller building societies planning to grow their buy - to - let books at a much faster rate. a good rule of thumb for financial stability is that when some form of credit is growing fast one needs to look very carefully at whether lenders ’ underwriting standards are slipping and at what is happening to the distribution of borrowers ’ indebtedness. the prudential regulation authority ( pra ) conducted a review of lending for buy - to - let mortgages and concluded that there was indeed some evidence of loosening underwriting standards and a possibility that this might increase. as a result, the pra board has issued a supervisory statement to clarify expectations for underwriting standards in the market. the statement includes guidelines for testing the affordability of interest payments and a minimum stressed interest rate for use in lenders ’ affordability tests. there are also substantial tax changes affecting the buy to let market. the fpc ’ s expectation is that the government ’ s changes in stamp duty and mortgage interest tax relief for buy - to - let, together with the pra ’ s actions, will probably dampen the growth of buy - to - let lending. mortgaged buy - to - let accounts for only around 10 % of all housing transactions for house purchase so the impact on the housing market as a whole may not be great. but market dynamics are difficult to predict and given the uncertainty around the impact of the tax and supervisory changes, the fpc decided to wait and see how the market reacted before considering whether to take action on buy - to - let. the committee continues to watch the buy - to -