to strengthen resilience of non - banks at a global level – as per the agenda of the fsb and iosco – is optimal. conclusion substantial reforms to the regulation and supervision of banks since the global financial crisis have resulted in a more resilient banking system. while banks remain at the core of the financial system, market - based finance has continued to grow in importance, both in europe and at a global level. this evolution of the financial system can entail significant benefits for the broader economy. but for those benefits to be realised fully, markets need to be resilient to stresses. further steps need to be taken to strengthen the resilience of segments of the non - bank financial system, including by developing a macroprudential lens in the regulation of non - banks. achieving that would require developing a regulatory approach that : focuses on cohorts of the non - bank sector ; aims to limit vulnerabilities before shocks hit ; ensures that regulatory outcomes reflect the evolving risk environment ; and, crucially, is co - ordinated at a global level. ultimately, that will better serve both investors and the broader economy. thank you for your attention and i look forward to the panel discussion. i would like to thank mark cassidy, gerry cross, patricia dunne, patrick haran, neill killeen and cian murphy for their helpful comments. see, for example, allen and gale ( 2000 ) ‘ comparing financial systems ’. 3 based on data collected by the financial stability board as part of the ‘ global monitoring report on non - bank financial intermediation ’. european systemic risk board ( 2022 ) ‘ nbfi monitor ’. 5 see daly et al ( 2023 ) ‘ the growing role of investment funds in euro area real estate markets : risks and policy considerations ’ for the euro area and cbi ( 2022 ) ‘ macroprudential measures for irish property funds ’ for the equivalent share in ireland. 6 see, for example, financial stability board ( 2020 ) ‘ holistic review of the march market turmoil ’ ; liang ‘ corporate bond market dysfunction during covid - 19 and lessons from the fed ’ s response ’ ; claessens and lewrick ( 2021 ) ‘ open - ended bond funds : systemic risks and policy implications ’ ; and dunne et al ( 2022 ) ‘ financial fragility in open - ended mutual funds : the role of liquidity management tools ’. 7 see, for example, pinter ( 202

doubled across the euro area over the past decade. 5 so market - based finance has been growing in europe, a trend that is also mirrored internationally, with potential benefits for the economy as a whole. the need for resilience in markets for those benefits to be realised fully, however, a critical precondition is that markets are resilient in the face of adverse shocks. if market financing is there in good times only, and disappears or gets disrupted when shocks hit, that can adversely affect the rest of the financial system or, increasingly, the broader economy. in fact, in recent years, we have seen incidents – at a global level – where external shocks resulted in a significant disruption in core markets. for example, in march 2020, amid a sudden ‘ dash for cash ’, there was severe disruption in a range of global markets, including short - term funding markets, longer - term corporate debt markets and even sovereign debt markets. 6 and, last year, we saw an abrupt disruption in the gilt market in the uk, with evaporating market liquidity and a sharp spike in gilt yields. this episode had significant and persistent adverse spillovers for other market participants and the broader uk economy. 7 of course, in both of these instances, what triggered the stresses were exogenous events. in the former case, the onset of a global pandemic, which the world had not experienced in about a century. in the latter case, market perceptions of a shift in fiscal policy in the uk. but these exogenous events were amplified by vulnerabilities within the financial system. indeed, a common thread in both of these episodes was a spike in demand for liquidity due to asset sales by non - bank financial intermediaries in light of underlying financial vulnerabilities, including liquidity mismatch and leverage. and, in both of these cases, returning to functioning markets required significant central bank interventions. in essence, what these stresses demonstrated was insufficient resilience in segments of the financial system, or – put differently – insufficient private self - insurance ex ante. and the eventual outcome was a need for public interventions ex post. this is not an optimal outcome from a public policy perspective. central bank interventions are not cost free. depending on their design, they can interact with the monetary policy stance. they can also entail risks to central bank balance sheets. and any market expectations of central bank interventions ex post can distort incentives of