Remarks in a speech made by Reserve Bank assistant governor Guy Debelle to an industry conference on Tuesday received some prominent coverage in financial media the next day. The remarks in question addressed the relative level of development of the domestic corporate bond market and whether investment banks are doing enough to bring issuers and investors together.Debelle argued that the corporate bond markets of the US are typically held up as the example that Australia should aspire to, but, in fact, the US is the exception in terms of relative size. The Australian market is comparable with the corporate bond markets of Europe and the United Kingdom. The financial system in the US has developed as market-based system. On the other hand, the financial systems of Europe, the United Kingdom, Japan, Korea and Australia are bank-based systems.Academic research is divided over whether the development of the US financial system as a market-based system is the result of regulation or history. Is the supremacy of financial markets in the US the result of 1930s' regulation, such as the Glass-Steagall Act, which greatly restricted the activities of banks, or is it due to the existence of debt markets in the US from the late 1800s?The answer is likely to be that both factors had a role to play.The bank-based financial systems of the aforementioned countries stand in contrast to this. Each had various regulatory restrictions on the activities of banks and debt markets, but, in most cases, the emergence of debt markets of any significance dates back to the 1970s, at best.So, Australia is not an exception, but, as Debelle said, this does not mean that the domestic corporate bond market cannot be larger than it is. Indeed, there are likely to be systemic benefits from it being so.Research points to there being greater financial system stability when financial markets of comparable size to the banking system operate side by side.Are investment banks doing enough to bring issuers and investors together? Debelle said he has observed issuers arguing that there are not enough investors, and investors arguing that there are not enough issuers. He concludes that this is really an argument about the price of the bonds, with each side being too far apart.This argument has been made in various ways in recent years and led to Treasury and the Commonwealth government, among others, taking the view that participants in the wholesale corporate bond market are big enough to sort this argument out for themselves. Therefore, efforts to expand the domestic corporate bond market should be focused on developing a retail market.This has so far proved to be a dismal failure, with only one plain vanilla corporate bond issue being made under a short-form prospectus in three years.My own research shows that there are two structural impediments to the development of the domestic corporate bond market, and price is not one of them. In fact, over the period from 1996 to 2010, I have found that corporate bond issuance was cheaper than syndicated