the eu economy continues to be outperformed by the united states and china. 1 / 7 bis - central bankers'speeches we know that due to structural issues, the european economy is dependent on bank financing with smaller capital markets which are fragmented along national lines. as a result, it is less resilient to shocks. 4 we know that funding is needed to support the green, digital and other transitions. how we respond to supporting these will require innovative thinking both from industry and from policymakers. it will need enormous investment to achieve a more competitive, innovative, de - carbonised and digitally transformed european economy. we also know that the pace of innovation and emergence of new technologies will accelerate. 5 the proliferation of powerful new technologies will impact on all aspects of daily life. they will undoubtedly bring benefits in delivering financial services which will involve greater accessibility and efficiencies and this will be good for consumers, businesses, the economy and society as a whole. so how do we respond to these challenges and changes? there is much to consider and debate within all of these. indeed an understandable reaction to change can be to resist or seek to frustrate some elements of it. instead, the quote attributed to abraham lincoln, neatly summaries the philosophy that is now needed – " the best way to predict the future is to create it ". in doing so, there is a role for all of us. there is a role at both a political and public policy level in europe to address the structural challenges europe is facing. strong collective action will be required if we are to have well - functioning capital markets which can compete in an increasingly fragmented world. there is a role at a political and public policy level in ireland and in other member states to address certain issues, such as long term savings needs and pension system reform. this will be critical to enable private funding to drive the next cycle of investment to respond to these challenges. the irish funds sector has a pivotal role to play in addressing these challenges. enabling investors to participate in capital markets, through better investment choices, is an economic necessity for the europe. investment funds allow investors to increase their investment opportunity set, to improve the risk / return profile of their portfolio and to entrust oversight of their investments to a professional fund manager. the letta report makes a strong and reasoned case for a new type of single market under the banner of a savings and investment union. there is a need to create a bridge between eu savings and investing in the

are identified and mitigated. at the same time, regulatory intervention should : 1. support innovation and product development to meet the changing needs of investors and the broader evolution of the global financial sector ; and 2. be appropriately calibrated in order to achieve the right outcomes without being unduly onerous on market participants as ultimately inefficiencies will be borne either by the end investors or users of the financial service. in europe, ensuring consistent regulatory outcomes across the union is key in a multipolar capital market. this is particularly important where the cross - border nature of financial services, and funds in particular, can bring an added complexity. the irish funds sector has built an international reputation for excellence and expertise. our place as an international financial centre brings with it certain responsibilities. it requires a continued commitment to high quality and effective supervision while striving to play a leading role in international policy development in both european and international fora. these considerations have shaped our priorities and the central bank's strategy that recognises the complex and rapidly changing environment in which firms operate. while the continued growth of the sector in terms of both its size and range of activities can benefit the domestic economy, it also requires careful monitoring 4 / 7 bis - central bankers'speeches and ongoing management to mitigate against any potential risks to either investors or broader financial stability. in this context, it is important to consider both the functioning of the overall ecosystem as well as its constituent parts. macroprudential regulation this is why the central bank has sought to positon ireland at the forefront of the development of a macro - prudential framework for non - banks, in particular investment funds. the aim of our contribution is to advance the debate the development and operationalisation of such a framework. a feedback statement following our discussion paper on the topic will be issued over the coming months. this feedback statement will include elements of the discussion from the central bank's conference on macro - prudential policy for funds which we hosted earlier this week. this was an opportunity to bring together senior leaders – across the public and private sector in ireland, europe and internationally – for an exchange of views. the topic is high on the european commission's agenda – yesterday ( 22 may ) their technical workshop on non - bank financial intermediation launched a targeted consultation on macro - prudential policies for the sector. that workshop focused on ensuring effective monitoring and risk management for funds from a financial stability perspective and how to