persist even in the absence of individually systemic institutions. and with less vulnerable money market funds, other cash - rich entities could emerge as a source of inexpensive funding for the shadow banking system. finally, as i have noted, the systemic risks associated with short - term wholesale funding in prudentially regulated institutions have not fully been countered by the important capital and liquidity standards adopted since the crisis. my purpose today has been to reinforce the point that a sounder, more stable financial system requires a more comprehensive reform agenda. bis central bankers ’ speeches

depressed the valuation of equity shares, but it also has been reportedly a factor in the rising risk spreads on corporate debt issued by the lower rung of investment - grade and belowinvestment grade firms, further elevating the cost of capital for these borrowers. businesses concerned about the impact of possible adverse publicity regarding their accounting practices on their access to finance could revert to a much heavier emphasis on cash generation and accumulation. such an emphasis could slow new capital investment initiatives. the recent impressive advances in productivity suggest that to date any impairment of efficiency of u. s. corporations overall has been small. efficiency is of course a key measure of corporate governance. nonetheless, the danger that breakdowns in governance could at some point significantly erode business efficiency remains worrisome. well - functioning markets require accurate information to allocate capital and other resources, and market participants must have confidence that our predominately voluntary system of exchange is transparent and fair. although business transactions are governed by laws and contracts, if even a modest fraction of those transactions had to be adjudicated, our courts would be swamped into immobility. thus, our market system depends critically on trust - - trust in the word of our colleagues and trust in the word of those with whom we do business. falsification and fraud are highly destructive to free - market capitalism and, more broadly, to the underpinnings of our society. in recent years, shareholders and potential investors would have been protected from widespread misinformation if any one of the many bulwarks safeguarding appropriate corporate evaluation had held. in too many cases, none did. lawyers, internal and external auditors, corporate boards, wall street security analysts, rating agencies, and large institutional holders of stock all failed for one reason or another to detect and blow the whistle on those who breached the level of trust essential to well - functioning markets. why did corporate governance checks and balances that served us reasonably well in the past break down? at root was the rapid enlargement of stock market capitalizations in the latter part of the 1990s that arguably engendered an outsized increase in opportunities for avarice. an infectious greed seemed to grip much of our business community. our historical guardians of financial information were overwhelmed. too many corporate executives sought ways to " harvest " some of those stock market gains. as a result, the highly desirable spread of shareholding and options among business managers perversely created incentives to artificially