of labour, a centralised fiscal policy, and a limited incidence of asymmetric shocks. clearly, these conditions did not - and do not - hold for the euro area. after all, the euro zone is characterised by significant rigidities in labour and product markets, the absence of a significant centralised fiscal transfer mechanism, and national economies with unique institutional and economic features - a set of circumstances that results in a high incidence and impact of asymmetric shocks. in these circumstances, so the argument goes, such shocks are likely to lead to widening price differentials so that a common nominal interest rate in the monetary union results in different real interest rates among countries. for member countries with relatively - strong domestic demand and a higher - than - average inflation rate, the lower real interest rate fuels domestic demand and national inflation. conversely, for countries with relatively - weak domestic demand and a lower - than - average inflation rate, the high real interest rates put further downward pressures on domestic demand and inflation. a one - size monetary policy, in other words, does not match the needs of all members. the foregoing, traditional view of optimum currency areas neglects several important factors. it seeks to identify the characteristics that a country should satisfy prior to joining a monetary union - that is, ex ante. we now know, however, that participation in a monetary union may itself induce changes in economic structure and performance ex post through at least two channels. these channels operate through enhanced credibility and trade and financial integration. how does the credibility channel work? a major benefit of participating in emu, especially for countries such as greece, italy, portugal, and spain that have had recent histories of relatively - high inflation rates, has been the credibility gain derived from eliminating the inflation bias of discretionary monetary policy. with low and stable inflation and inflation expectations, nominal interest - rate differentials between these countries and countries with histories of relatively - low inflation rates, such as germany, have almost been eliminated. with lower nominal interest rates in traditionally high - inflation countries, the cost of servicing public - sector debt is reduced, facilitating fiscal adjustment, and freeing resources for other uses. moreover, with low and stable inflation, economic horizons lengthen, encouraging a transformation of the financial sector. the lengthening of horizons and the reduction of interest rates stimulate private investment and risk taking, fostering faster growth. for greece, entering the euro zone has meant not only the loss of an independent monetary policy the fruits of which were amp

issued prohibition notices in several cases, so that in total, citizens can avail of the service of insurance intermediaries in ireland in the knowledge they are fit for the role, competent and solvent. mention of passporting brings me neatly to my third case study, on brexit. since the uk referendum, there has been a material increase in the number of authorisation 3 / 5 bis central bankers'speeches queries from uk - authorised entities. many of these engagements have been preliminary in nature. but several have moved into the pre - application or application phase, and this is likely to continue in the coming months as uk firms prepare for the possibility of a loss of passporting rights into the eu. as the governor stated to this institute in august 1 the central bank is committed to providing transparency, consistency and predictability with regard to our regulatory and supervisory responsibilities. potential applicants will find the central bank to be engaged, efficient, open, and rigorous. in determining an application for authorisation, we follow clear, published rules and processes derived from eu law, and are guided by our mandate to protect consumers. we are mindful of the fiduciary role of financial actors, and the need to safeguard deposits, premiums, or client assets from loss stemming from incompetence, mis - governance or outright failure. in authorising a firm, we will want to be satisfied that we are authorising a business or line of business that will be run from ireland and which we will be effectively supervising. we will expect there to be substantive presence. outsourcing and insourcing are acceptable – up to a point. one may outsource activities, but one may not outsource responsibility. a firm may not outsource to the extent that it is effectively hollowing out its regulated activity. it has been said that the central bank does not want to see investment banking or trading in dublin. i want to be clear : we do not have such a position. we have not sought to dissuade any such entities from seeking authorisation nor are we planning to do so. such applicants, of course, like any other applicant, can expect a rigorous process where we will expect to understand clearly the risks inherent in the business and how they are managed and mitigated. we will need to be satisfied that this is done appropriately and well. this is no more and no less than would be expected by any applicant for any type of business. in this regard, it