their own natural equity providers. this brings me to the last part of the story, namely the growth of non - bank asset management in its broadest sense as the size of bank balance sheets has tended to reduce post - crisis. it is striking that if you were familiar only with a chart of the evolution of global assets under management over the last twenty years, you should be excused for failing to spot that a global financial crisis had occurred. it follows from what i have said that this shift from banks to non - banks makes sense as we seek to achieve a clearer demarcation of the types of liability or funding contracts and the assets best suited to go with them. but it only makes sense if a few conditions are met, two in particular. first, that there is no lack of clarity about the nature of the assets held under management. thus the label on the can is an accurate description. take as an example the recent failure in the us of the third avenue focused credit fund ( focused on what a comedian might say ). the purpose of the fund was to invest in high yield debt. the label seems to have made that clear, and it wasn ’ t therefore in the form of a aaa label which obscured the reality. the failure of this fund has not made major ripples all on its own. why? i would argue because there was no obvious lack of clarity around the assets, and this is a reminder against the re - appearance of opaque instruments and complex tranching. the second condition to meet is that there is no illusion about the liquidity of the assets. it is critical that investor expectations are well adjusted to the prevailing liquidity conditions. a lot of work is under way to assess the market liquidity implications of the expansion of assets under management, and this is important for our remit in financial stability. an important part of this work is to do all we can to ensure that investors understand the characteristics of the assets they hold, and that the liquidity promised by funds to their investors mirrors the market liquidity of the underlying investments. conclusion in conclusion, the objective of the financial reform programme is clearly not to return to the unstable pre - crisis years, however attractive some of the statistics of that period look in isolation. the response has been to strengthen the loss absorbency of the banking system but also to enable greater clarity between the different forms of bank liabilities consistent with the economic terms of the contracts. this may seem like dry balance sheet stuff but the benefits are major

ireland, the labour share in 2021 was 86 per cent ; in the ‘ other services ’ category, which also includes many consumer - facing services, it is 90 per cent. 4 to understand the potential for cost - push inflation from wages, we need to know the pass - through from wages to prices. for ireland, estimates range from around 60 per cent in construction to over 80 per cent in firms in the services sector, with similar figures for other euro area countries. 5 pass - through can also be higher when inflation is higher. this can happen for different reasons such as shifting inflation expectations or because of strong demand, which allows firms to more easily pass through higher input costs with lower risk of significant negative demand impacts at the firm - level. all of this means that central banks need to closely monitor wage developments as a potential source of future inflation. given what i am seeing in the data, three questions come to mind : what are we seeing in current labour market tightness measures, and what are the implications for wage growth? over what sort of time period do real wages adjust to an unexpected inflation surge like we have seen in the last two years? how is our monetary policy transmitting to labour demand? in the final section, where i summarise recent decisions and projections, i address the final two questions, but first : how tight is the labour market? how tight is the labour market? recognising that labour supply often comes from new workers that our outside the labour force, central bank research released earlier this week uses a wider measure of labour market ‘ slack ’ which, in addition to unemployed persons, includes persons who are partially attached to the labour force ( or ‘ palf ’ ) and who had previous work experience ( figure 6 ). 6 the motivation for including the palf group is that they tend to have very similar transition rates into employment as ilo unemployed individuals, of between 13 and 16 per cent per quarter in the historic data. the research finds that this wider unemployment measure can help to explain past wage dynamics in a phillips curve, using data from 2000 - 2019. past inflation also puts significant upward pressure on nominal wages. the key message from the analysis that even after including other variables such as inward migration, exchange rates and productivity, the model over predicts recent wage growth. in other words, based on historical patterns in the data, we would have expected higher wage growth in recent quarters, given observed labour market tightness and past inflation. the gap is around +