borrowers are not being served by market - based finance. 10 in response, the bank of england and ecb are working to promote a sustainable model of securitisation that is simple, transparent and comparable. 11 in other words, one that allows banks to originate and distribute assets for which credit assessment can be most readily performed in the market. simple, transparent and comparable securitisations will support improved calibration of risk weights and retention requirements for banks and prudential standards for insurers that ravi menon has advocated. 12 greater reliance on market - based finance will need to be matched with measures to ensure its resilience. the international community will need to shift focus to new risks and vulnerabilities, many of which will emerge outside the banking system. as deputy prime minister tharman shanmugaratnam has noted, the safety of finance will depend “ on whether we stay intensely alert to the risks of the future, including especially the risks we do not yet see or know, rather than focus only on preventing the last crisis from recurring. ” 13 the fsb has set up a broad - based network for information - sharing and reporting on the scale of shadow banking activity. this work is far from academic because, although you wouldn ’ t necessarily know from a reading of financial market indicators, these are riskier chart 4 shows that non - securitised loans continue to account for almost 30 % of global financial assets. corporate bonds and securitised loans account for only 7 %. chart 5 shows that in each of the us, uk and europe, the period since the crisis has seen the stock of outstanding bonds move towards the stock of outstanding bank loans. see fsb ( 2014e ). chart 6 shows the post - crisis collapse in european securitisation issuance, which has been particularly concentrated in residential mortgage - backed securities. bank of england and ecb ( 2014 ) is a consultation paper on the development of such a model of securitisation. the eba is also consulting on the same issue, see eba ( 2014 ). menon 2013. shanmugaratnam ( 2013 ). bis central bankers ’ speeches times. there is a disconnect between developments in real economies and the degree of financial risk taking. it is particularly notable how the search for yield has compressed liquidity premia across markets. this is unlikely to be sustainable over the medium term because it exists against a backdrop of much - reduced market -

is harder for policy to boost productivity and growth. the second half of the 20th century, the median level of gdp per capita was 15 % below the level predicted from the trend of the ten years prior to the crisis, which is roughly where the uk is currently. see reinhart, c. m., and v. r. reinhart “ financial crises, development, and growth : a long - term perspective ”, the world bank economic review. refers to forecasts made for the first year after the april imf weo in question ; for example the april 2010 weo forecast for 2011 relative to the final outturn data. bis central bankers ’ speeches in these secular stagnation views of the world, the water around us was getting colder before the crisis and has become colder since. but we have not noticed it. and it is this, rather than the slowness of the healing process and the aftershocks of the crisis, that explains the serial disappointments in economic growth. i have set this out as two very different stories about what is happening – “ slow healing ” and “ secular stagnation ”. of course, given enough unfortunate events and enough repeated disappointment on the pace of recovery, they could look and feel the same for a long time. there is much that is common to them. in both stories for a period of time, productivity is lower, interest rates stay low for long and pay and income growth is weak. but these effects are longer - lived in a secular stagnation world. it is quite possible that we are in some combination of both worlds. but i think it is important, especially when thinking about policy, to distinguish the different forces that drive these respective stories about the world. the uk picture which brings me to the uk. when i joined the mpc over two years ago, the data seemed to point quite firmly towards the healing story. the uk was experiencing a burst of growth, driven by the return of credit and confidence and pent - up demand from the recession and slow recovery. many commentators were arguing that the bank was in danger of getting behind the curve ; these arguments grew louder as unemployment fell at its fastest rate for 40 years. the bank ’ s forecasts two years ago suggested that growth would fall back a touch, but only a touch, to around its pre - crisis average of 0. 7 % per quarter. our forecast for growth in 2014, 15, 16 was 3. 4 %, 2. 7 %