Banks have been lowering their high pre-crisis leverage levels and are preparing for stricter regulatory capital requirements, and in the process have been reducing their lending. With the banking sector expected to shrink considerably, other actors, especially institutional investors, and new forms of financial intermediation will have to meet the credit needs of the economy. This may not only require enhancing and enlarging the perimeter of regulatory oversight, but may also need policy incentives to encourage new forms of market based lending, especially as it concerns financing long-term investment, including infrastructure, and SMEs. This was the background for the discussions at the April 2012 OECD Financial Roundtable that this note summarises. On the current outlook, participants agreed that recent policy actions in Europe have had a positive impact but more and longer-term policy actions will be needed to restore confidence among market participants and set the basis for recovery. Deleveraging is necessary but only about half-way completed. Regulatory reforms should support this process in a balanced way, avoid unintended consequences and help the transition towards increased non-bank intermediation by not imposing bank-like regulation on, e.g., insurance companies and hedge funds. Securitisation should be revitalised – perhaps with some (initial) government and regulatory support – to close the bank lending gap, especially for SME lending. Covered bonds can contribute in this, too, but their benefits may be limited, i.a. due to asset encumbrance. Mezzanine financing instruments could be useful for SME financing, and informal forms of equity financing could help small dynamic start-up companies.