a measure of the work still to be done by the industry and regulators to restore investor confidence and improve liquidity. there is, of course a good story to tell : the arrears rates on australian mortgages have remained at a low level and are well below the arrears rates in many other countries ( graph 8 ). graph 8 the state of the securitisation market in australia is by no means unique, with issuance in other markets also sluggish. credit markets globally still remain cautious, with the sovereign debt concerns in the second quarter tempering investor appetite. for example, issuance in the uk rmbs market was particularly weak in the early part of the year, but has seen a modest pick - up in activity more recently ( graph 9 ). one promising development has been the pick - up in offshore issuance by uk originators, exemplified by the recent lloyds issue in the us. graph 9 a constraint on offshore issuance more specific to the australian market has been the influence of the cross - currency basis swap on the cost of issuing in the international market. as i noted earlier, the international market was an important source of demand for the australian market prior to the crisis. a significant share of the issuance to offshore investors was in foreign currency, but post - crisis there has only been one issue with a foreign - currency tranche. part of the reason for this is that the wide basis swap has added to the hedging costs of offshore issues making them less economic, compared with domestic issues. conclusion in conclusion, i have aimed to provide a recap of the state of play in the australian rmbs market. the market is slowly returning to life and i believe it will again play a useful role in the provision of credit in australia. but i do not see it returning to its pre - crisis share of the market any time soon. i look forward to discussing the policy issues surrounding the market with my fellow panel members.

asset - based financing firms, peer - to - peer lenders, invoice discounters, leasing firms and other types of non - bank financiers have entered the domestic market in recent years and provide a significant potential alternative source of financing for smes. 3. credit union sector credit unions play an important role in irish society and in the financial system. the role and ethos of the sector reflect the primary objectives and purpose of credit unions - to promote thrift among their members by the accumulation of their savings and the creation of sources of credit for members'mutual benefit at fair and reasonable interest rates. our role in relation to credit unions is reflected in our statutory mandate to regulate with a view to ensuring the protection by each credit union of the funds of its members and the maintenance of the financial stability and well - being of the sector. the central bank is supportive of further development of credit union business models. the consolidation and strengthening of the sector has seen improved standards in the running of credit unions and their financial resources but further progress is required on embedding governance, risk management and operational capability. the emergence of larger and more sophisticated credit unions presents additional opportunities. credit unions are already permitted to provide “ commercial ” loans but are not currently particularly active in this type of lending. the central bank will shortly be consulting on proposed changes to the lending framework for credit unions. the proposed revisions also provide increased capacity to engage in both home mortgages and commercial lending for those credit unions with the financial strength, competence and capability to do so. should credit unions wish to become involved in a local public banking model, they will need to ensure the continued protection of members ’ funds and comply with the legislative and regulatory framework15 that applies to credit unions. i hope the above has been useful in terms of the topics that the committee wishes to discuss. 2 / 3 bis central bankers'speeches 1 department of finance and department of rural and community development report on local banking available here. 2 for further information on the role of the sme sector in the irish economy. see address by philip r. lane, governor of the central bank of ireland, at the irish small and medium enterprises association annual conference 2016, royal dublin society available here. 3 see carroll, james et al ( 2016 ) irish sme investment in economic recovery. in central bank of ireland quarterly bulletin 02, april 2016. available here. 4 see footnote ( iii ) page 88. 5 see central bank ( supervision and enforcement ) act