are some providers, often offering relatively niche products or serving niche markets, where the cost of setting up and running a new eu subsidiary may be prohibitive. in addition to the contract continuity risk, there are clear risks of reduced competition and a reduction in customer choice. markets in fund management, uk fund managers could lose the right to manage irish authorised funds under the passporting regime. such funds could also lose the power to delegate investment management and risk management functions to uk authorised entities. brexit is also going to impact on how financial institutions interact with each other. new regulations brought in since the crisis have sought to increase transparency and reduce risks in the securities and derivatives markets. the effect of this is that more firms are required to clear and settle their securities and derivatives with central counterparties ( ccps ) and central securities depositories ( csds ). however, much of this essential financial market infrastructure, including as it relates to ireland, is currently located in the uk. for example, the london clearing house ( lch ) is one of the world ’ s largest ccps. lch dominates the clearing of over - the - counter interest rate swaps, with 5 / 11 bis central bankers'speeches over 95 per cent of the market13, and regularly clears in excess of $ 1 trillion notional per day. if uk ccps are not recognised under eu regulations after brexit, firms engaging in, for example, interest - rate swap transactions would be unable to clear them in the uk. this issue is compounded by the lack of sufficient substitute capacity elsewhere. this will affect any eu firm that is using interest - rate swaps to mitigate the risk of interest - rate changes, elevating financial stability risks and, again, potentially reducing consumer choices. a similar risk of loss of market access arises in relation to the settlement of equity securities traded on the irish stock exchange. these are currently settled in the uk ’ s central securities depository. after brexit, the uk csd may lose its right to passport its services into ireland, with a direct impact on the settlement of irish equity securities. brexit impact on financial services firms these are the system - wide impacts. i now want to talk about the impact at the firm level. i will differentiate here between firms already operating in ireland and how they might be impacted by brexit, and new firms that are looking to move into ireland – including where a new business line is being transferred into an existing firm

in any detail. bis central bankers ’ speeches in conclusion, the challenge for policy makers is to understand and attempt to appropriately regulate the evolving financial services landscape, while at the same time balancing oftencompeting objectives of competition and choice, financial stability, and the effectiveness of macroeconomic policies. we remain vigilant and alive to these challenges, just as we expect a similar attitude from our regulated firms. to state this is easy, to deliver more difficult. i wish you all well in your endeavours in navigating this phase of technological innovation in financial services. acknowledgements : i thank anna lalor, anne - marie mckiernan and ed sibley for their inputs into this speech bis central bankers ’ speeches