these effects will reduce overall demand for irish exports, although this could be mitigated by irish exporters finding new markets or by an increase in foreign investment and inward migration. * * * market - based finance i have spoken previously of the rise in non - bank finance and the risks therein. ireland hosts a large and internationally orientated market - based finance sector that has grown rapidly in recent years. irish - resident funds are the largest component of this sector in ireland. 5 ( figure 9 : financial assets by institution type as a multiple of the country's gdp ( gni * ) in 2017, selected countries ) there are real benefits of market - based finance. it reduces reliance on the banking system, which in europe is relatively high. but, to realise those benefits, it is also important that marketbased finance is resilient so that it can absorb, rather than amplify, shocks. at the central bank of ireland – like a number of other authorities internationally – we have increased our monitoring of the risks of the sector, with a particular focus on vulnerabilities in funds. given these entities are international and cross - border in nature, we have also been an active participant in international work on this issue. key risks include liquidity mismatch and excessive leverage in funds. the onset of the covid - 19 saw a significant disruption in markets which raised questions around the resilience of markets in the face of shocks. for example, the onset of the pandemic saw large outflows from funds globally. irish domiciled funds also experienced large outflows, particularly those with exposures to less liquid assets or assets that became temporarily illiquid. one of the fund segments that proved particularly susceptible to outflows in march was corporate bond funds. the corporate bond market also saw a sharp deterioration in market liquidity at the onset of the covid - 19 shock. flows into corporate bond funds have stabilised recently, as global central bank interventions have supported financial market functioning. but 4 / 6 bis central bankers'speeches looking ahead, a key risk for the corporate bond market stems from potential credit rating downgrades. 6 we will continue to monitor the markets for such developments. a second key area of vulnerability since the onset of covid - 19 was in money market funds. in march, as the crisis began to unfold, some irish resident money market funds – similar to money market funds globally – experienced a substantial increase in redemptions

. irish resident money market funds responded to this period of stress by increasing their liquidity positions and reducing the maturity of their assets. this means that money market funds are better placed to meet any future redemption pressures. but it also implies that money market funds have increased their investment in short - term funding to the banking system and the real economy and reduced their exposure in long - term funding. as money market funds play an important role in the supply of credit to the real economy, we also need to continue to monitor these developments. although the focus currently is on the near - term monitoring of risks and ensuring a coordinated international response to the covid - 19 shock, the stresses experienced in march further highlight the underlying structural issues relating to some segments of the funds sector. risks such as liquidity mismatch and leverage continue to be part of our focus. we are thinking hard about how we can mitigate these risks. over the medium - term, one key area of focus needs to be developing and operationalising macroprudential tools for market - based finance. in the case of the banking sector, we have seen the benefits of building resilience in good times and allowing that resilience to be used when shocks hit. we do not have an equivalent framework for market - based finance. potential areas of focus include the development of an internationally - consistent framework for the imposition of ex - ante macroprudential leverage limits, and further work at an international level to ensure the consistent availability and use of liquidity management tools across the eu ( as previously highlighted by esrb ( 2017 ) in their recommendation on investment funds ). 7 more recently, and in response to the covid - 19 shock, the esrb ( 2020b ) also emphasised the importance of the timely use of these liquidity management tools in responding to redemption pressures. 8 * * * conclusion thank you for listening. i ’ ll stop there and take questions. 1 i would like to thank thomas conefrey, david byrne, stephen byrne, neill killeen, terry quinn and zivile zekaite for their contributions to my remarks. 2 european commission, spring 2020 ec forecast ; imf world economic outlook, 6 april 2020 ; consensus economics, 11 may 2020 ; ecb ’ s survey of professional forecasters ( spf ) conducted between 31 march and 7 april. 3 see conefrey and walsh ( 2020 ) “ dealing with friction : eu - uk trade and the irish economy after b r e x