by the central bank. on the ground, the differences you will note if your firm is in this category are more effective liaison with your direct supervisory team as well as more frequent on - site visits with yourselves by my staff. i will be asking my supervisors to look more closely at where those investor protection and financial stability risks i talked about earlier exist, including challenging assumptions that lie behind business models and strategies in the sector and the governance, systems and controls that underpin them. in contrast, each individual fund, in itself, has a limited potential impact on financial stability and investors in the event of failure – and so, each of the more than 5, 000 funds domiciled in this jurisdiction – cannot and should not expect the same level of supervisory engagement as afforded to the fund service providers. our supervisory model, however, does provide capacity for us to react to triggers and problems that emerge in individual funds as well as random spot - checks. we will also increasingly rely on the use of our thematic supervisory tool, namely examining a specific issue across a cross - section of institutions. shadow banking while individual funds may be low impact entities in our supervisory model, the funds industry is of course a high impact sector viewed collectively. this is not just a question of investor protection. increasingly, the interest of the international regulatory community is directed at the level of systemic risk posed by particular parts of the funds industry, namely money market funds. the backdrop to this interest is the risk of investor runs on money market funds as a result of a threat of breaking the buck and the onward impact of such a run on the markets in which those money market funds are invested. as you are no doubt aware, this is clearly on the regulatory agenda at the g20, in iosco, at the european commission and also in the us at the sec. a few concluding thoughts on the regulatory agenda in this area. my first high - level message, is that the industry in ireland must be prepared for change. during the financial crisis, investor runs on mmfs led to a disruption in the flow of finance to bis central bankers ’ speeches the real economy and necessitated dramatic interventions by public financial authorities. the central bank believes that regulatory reform should focus on the need to reduce the probability of investor runs, to curb implicit support from sponsors and to reduce the need for support from the taxpayer. in order to avoid disruptive industry shifts, my preference is for international alignment between europe and the us in this area. it appears that the sec

relation to particular areas such as indices, where we have seen the eligible asset restrictions arguably being circumvented. esma has already done some good work in its recent guidelines on the use of indices, but there may be more that can be done. we can bis central bankers ’ speeches also expect the output from the debate on shadow banking and systemic risk in the money market funds industry to feature heavily in ucits vi. as i mentioned, i will come back to this topic of shadow banking a bit later. domestic developments europe will clearly be the main driver of the regulatory framework for the funds industry in ireland. but there is also, as you know, a domestic regulatory framework in place that is not derived from eu law and which in many cases predates it. the implementation of the aifmd provides an opportunity to revisit this framework. we are working hard on aifmd implementation with the goal of providing certainty to industry as soon as possible. my colleague gareth murphy, who spoke to you last year, is chairing a working group on aifmd implementation involving representatives from the department of finance and industry. we will be consulting publicly on proposals very shortly. this process provides an opportunity to revisit our domestic framework for non - ucits funds. let me take a little time to explain our approach and highlight one or two issues under active discussion. we believe it is important to use the implementation of the aifmd as an opportunity for a systematic rethink of our non - ucits regime. our current domestic regime has evolved piecemeal over many years in response to particular concerns and without any relevant eu standards to refer to. we now need to be prepared – in light of the implementation of this major piece of european legislation – to re - examine those elements of the existing domestic framework. our approach will be informed by the principals included in the taoiseach ’ s strategy for the international financial services sector, namely the need to carefully re - examine the case for domestic standards which exceed eu requirements, in terms of establishing that they are in the public interest. we are prepared to retain additional domestic standards if we believe the public interest test is met. but our starting point is of a rigorous case - by - case reassessment of the existing domestic framework to see whether these domestic requirements need to be retained. for example, one issue under discussion is whether we should establish a new category of fund based purely on the minimum standards of the aifmd.