simply operating at a lower scale, the risk of the banks, and their capital requirements, are being reduced. the first and to date largest element of the downsizing was the sale during 2010 ( at heavily discounted prices ) of the development property - related loans to the purpose - created asset management company nama. the losses that crystallised in these loan sales – larger, as i have mentioned, than expected by anyone – have sometimes been blamed by critics for destabilising the system, though i am sure that had these losses not been transparently revealed, they would quite soon have been suspected by the market ; losses on such a scale could not have been concealed for long, even if that had been desired. in the aftermath of that experience it is, perhaps, not surprising that the authorities are most reluctant to force the pace of downsizing to the point of incurring fire - sale losses. to be sure, further sales have already occurred, most notably of the polish subsidiary of allied irish bis central bankers ’ speeches bank. and steady progress is anticipated on the rest of a growing class of what are now being identified as non - core banking assets. but there cannot be fire - sale losses, as the sovereign – which would ultimately have to fund them – cannot afford them. as soon as assets can be sold outright ( as distinct from being placed in a “ bad bank ” vehicle ), then some of the banks ’ excessive borrowings from the central bank – a legacy of the years of extravagant bank reliance on footloose foreign funding – can be reduced. increasingly it seems evident that placing the continuing parts of the system on a firm footing can best be done through the involvement of new foreign owners who can bring capital, risk control and other management skills. this would effectively short - circuit the risk - reduction process now under way. with their due diligence complementing the tail - risk reduction envisaged from pcar2011, it is not unreasonable to suppose that such investors will see sufficient franchise value in the continuing banks to convince them that attractive investment opportunities exist. provided they bring credible business plans, i look forward to welcoming new owners of ireland ’ s downsized and cleaned - up banks. * * * here i think it is worth acknowledging that the ecb and eurosystem have stepped up to the mark and provided ample liquidity to the irish banking system in a period of extraordinary liquidity pressure, thereby dramatically reducing risk. of course the provision of such liquid

understanding how – in light of evolving financial vulnerabilities – funds may collectively respond to different adverse shocks. and, in turn, how such behaviour could affect the functioning of core global markets in times of stress. this can only be achieved through close collaboration, both across borders and across authorities. and it is necessary if we are to mitigate system - wide vulnerabilities effectively ex ante. which brings me to my last point, before we finish up. delivering a macroprudential perspective in the oversight of the funds sector will not happen overnight. it took over a decade to develop that framework for the banking sector. and that was from a starting point of decades of microprudential regulation. 4 / 5 bis - central bankers'speeches still, it is important that we make progress and – where we do identify systemic vulnerabilities – we have the courage to act, before shocks hit. because ultimately the costs of inaction can be large, both for investors and the broader economy. this has been, and will remain, a priority for the central bank of ireland in the years ahead, working with colleagues internationally and domestically. so let me finish off here. thank you again for joining us today. have a good evening and a safe return home to those travelling back. 1 see fsb ( 2023 )'revised policy recommendations to address structural vulnerabilities from liquidity mismatch in open - ended funds'at : https : / / www. fsb. org / wp - content / uploads / p201223 - 1. pdf. 2 see central bank of ireland ( 2022 )'the central bank's macroprudential policy framework for irish property funds ', available at : https : / / www. centralbank. ie / docs / defaultsource / financial - system / financial - stability / macroprudential - policy / nbfi / macroprudentialmeasures - for - irish - property - funds. pdf ; and central bank of ireland ( 2024 ),'the central bank's macroprudential policy framework for irish - authorised gbp - denominated ldi funds ', available at : https : / / www. centralbank. ie / docs / default - source / publications / consultation - papers / cp157 / macroprudential - framework - for - irish - authorised - gbp - ldifunds. pdf? sf