- conventional monetary policy measures. the response of public authorities in ireland notwithstanding the limited exposure to structured financial products of irish banks, the interaction of the global shock to financial markets with the pre - existing vulnerabilities in the domestic economy triggered systemic repercussions here. a particular vulnerability here was an overheated property market that had been financed through the banking sector, in large part with funds raised on wholesale markets both at home and abroad. the immediate systemic consequences of the shortage of liquidity for the domestic banking system have been accompanied by the broader economic impact we are now experiencing. the principal motivation behind all of the decisions that have been taken subsequently with respect to the banking system has been to limit damage to the real economy from the banking crisis. the banking sector plays a crucial role in the modern economy by acting as a financial intermediary and ensuring that funds are distributed from those who wish to save to those who wish to borrow. when this vital function is impaired, it can have severe effects on economic activity. downturns that are preceded by episodes of financial stress tend to be longer in duration and, partly because of this, more severe than those caused by other factors. furthermore, when the financial stress is related to the banking sector in particular, then the impact tends to be even more significant. the approach adopted here in response to the crisis is consistent with the general approach adopted by countries across the eu ; namely, the initial introduction of a state guarantee for banks ’ liabilities, followed by recapitalisation of banks to ensure viability and nationalisation where warranted, and most recently, measures to address banks ’ non - performing propertyrelated assets through the establishment of the national asset management agency ( nama ). a final necessary stage must address the optimum shape and structure of the domestic banking sector that will be required to meet the needs of the economy in the years ahead. the state guarantee by end - september of last year, the severe shortage of liquidity in global money markets was impacting significantly on the operations of irish banks. funding pressures were exacerbated by negative international investor sentiment, related to irish banks ’ exposures to the property sector, at a time when property prices and transaction volumes were declining following a period of unprecedented increases. daily liquidity reports were showing that the situation was becoming increasingly strained. events came to a head on monday 29th september when it was found necessary to introduce a state guarantee for a range of domestic banks ’ liabilities.

me start with the role of aml / cft supervisors. in the first instance, it is essential that national aml / cft supervisors encourage the establishment of partnerships for the sharing of information through the development of clear guidance in addition to a verification process that is accessible, transparent, and capable of evolving over time. at the central bank, notwithstanding the fact that the aml regulation will not be applicable until july 2027, work is well underway on developing the necessary framework and governance procedures. the verification process will require not only the review of the application to ensure that it conforms with the requirements of article 75 but will also require the central bank to consult our colleagues in the office of data protection commissioner in relation to the data protection impact assessments ( " dpia " ). it will also be necessary to for the central bank to consult with the financial intelligence unit where necessary. in addition to fulfilling our statutory role in verifying partnerships for information sharing, in my view there is an additional and equally important role that aml / cft supervisors must play in order to realise the full potential of article 75 aml regulation. that is our role in fostering and supporting the development and adoption of technologies that facilitate the sharing of sensitive information through the use anonymisation technologies. the so - called privacy enhancing technologies ( pets ) have the potential to revolutionise information sharing between private sector operators. aml / cft supervisors such as the central bank of ireland can, i hope, act as a catalyst for the development and implementation of such technologies. 3 / 5 bis - central bankers'speeches one such way the central bank can do this is by continuing to enhance our engagement with innovation in financial services. in 2018, we launched the innovation hub for firms to engage directly with the central bank on innovation. since the launch of the innovation hub, the innovation ecosystem has continued to develop at pace in ireland and abroad. in line with the continuous development of the innovation ecosystem, we also have continued to deepen our approach by enhancing our innovation hub and outreach programme. this involves, firstly, enhancing the role of our innovation hub to deliver deeper, clearer and more informed engagement with the innovative ecosystem. secondly, we are establishing an innovation sandbox programme to inform the early stage development of selected innovative initiatives which are consistent with our public policy objectives. in july, we announced the theme of our first innovation sandbox programme that is very relevant to our discussion today, that of combatting financial crime. the sandbox