a group is appropriately regulated and supervised. 2 / 3 bis central bankers'speeches let me conclude by posing the question : what will the international monetary and financial system look like in 2043, when the central bank of ireland celebrates its centenary? no doubt, this question will be settled by the end of this afternoon ’ s symposium. regardless of how the future unfolds, i am certain that the central bank of ireland will pursue with great dedication our mandate to safeguard stability and protect consumers. 3 / 3 bis central bankers'speeches

, especially direct investment in the context of the irish economy. while equity investment has desirable risk sharing properties and does not generate the same financial stability risks as debt flows, a boom - bust cycle in equity funding can still contribute to macroeconomic volatility. however, fiscal policy is the appropriate stabilisation instrument to manage such cycles, rather than our macroprudential policy tools which are designed to manage debt - generating flows. let me also emphasise that membership of the monetary union provides an important buffer against international financial shocks. under the counterfactual of maintaining an independent currency, international financial shocks can generate volatility in exchange rates and interest rates, even if the underlying domestic macroeconomic environment is stable. such volatility is especially problematic for small open economies. in a financially - globalised world, it is also the case that banks, firms and households in small open economies may incur foreign - currency liabilities. in a crisis environment, the existence of such foreign - currency liabilities may be destabilising, especially if foreign - exchange reserves are insufficient to provide cover against the risk of a run on these foreign - currency liabilities. in contrast, the capacity to raise cross - border funding in a common currency together with access to the common liquidity facilities of the european central bank acts as a stabilising mechanism in the event of a crisis event. in this way, monetary union can be an effective mechanism in addressing the macroeconomic and monetary challenges posed by financial globalisation. in similar fashion, the coordinated european system of financial supervision ( esfs ) allows europe to manage the regulatory and supervisory challenges posed by international trade in financial services. a common rule book and a level playing field means that firms cannot engage in regulatory arbitrage across the member countries, while home - host coordination issues can be managed within the institutional framework provided by the european supervisory authorities ( esas ). in banking, the successful operation of the single supervisory mechanism ( ssm ) has proven its value in fostering the development of a unified approach to banking supervision. of course, eu regulation and supervision takes place within a broader global context, with an important role for global coordination of regulation through institutions such as the basel committee for banking supervision, the financial stability board and iosco. through international coordination among regulators, it should be feasible for the industry to reap the scale economies available to multi - country financial groups, while recognising the importance of ensuring that each individual legal entity within