that is how we in the central bank of ireland see this issue and it is the system - wide perspective that was the focus of last july's paper and the broader work on developing the macroprudential framework. in our view it is the macroprudential perspective and the investor protection perspective, rather than the macroprudential perspective instead of it. we believe that it is supervisory, regulatory and macroprudential authorities that are best placed to identify the need for and develop a macroprudential perspective to address such system - wide concerns. while the current investor protection - focused regulatory framework for the funds sector can help to address some funds - specific elements of systemic risk, it does not fully address them all. 4 / 8 bis - central bankers'speeches we therefore need both perspectives and finding common ground and advancing work in this area is critical to ensuring the resilience of the funds sector. our final panel today will discuss this issue in further detail. a macroprudential framework for funds : no'one - size - fits - all'when we think about a macroprudential framework for funds, two underpinning themes come to mind : first, the need to have a well - articulated set of objectives and principles ; and, second, that the framework should be bespoke to the nature of the systemic risk from fund cohorts. it should not be a replication of the banking framework and it should not be a'one - size - fits - all approach '. instead, the objective of macroprudential policy for the funds sector would be to ensure that this growing segment of the financial sector is more resilient and less likely to amplify adverse shocks. this would better - equip the sector to serve as a resilient form of financing supporting broader economic activity. how would we achieve that? macroprudential policy could achieve this by preventing the build - up of excessive vulnerabilities across relevant cohorts of the funds sector and / or limit the potential for the sector to amplify adverse shocks through its interconnectedness with other parts of the financial system. this overall objective would then need to be supplemented by several overarching principles, guiding discussions when considering different policy options. it's also important to be clear what such a framework is not seeking to achieve. a macroprudential framework for funds would not – and cannot – aim to target asset prices. in our discussion paper we set

patrick honohan : publication of the central bank of ireland annual report 2010 opening statement by mr patrick honohan, governor of the central bank of ireland, at the publication of the central bank of ireland annual report 2010, dublin, 30 may 2011. * * * we are today publishing the central bank ’ s 2010 annual report ; and for the first time an annual performance statement on our financial regulatory work. the latter is a new requirement under the central bank reform act of 2010. i am joined today by my colleagues, tony grimes, deputy governor for central banking ; matthew elderfield, deputy governor for financial regulation ; and gerry quinn, chief operations officer. major challenges on several fronts engaged the central bank during 2010, and continue to do so. the main driving force remains the pressing need to restore stability to the irish banking system. the central bank continues to work with the ecb to ensure that the necessary liquidity is available to allow the irish banking sector continue to function. the central bank has set new, tougher capital requirements to ensure the banks are strong enough to withstand future losses. we have brought in new consumer protection measures, not least in relation to the treatment of mortgage arrears. we have introduced new standards of corporate governance to the financial services industry and we have embarked on a major programme of enhancing supervision and enforcement. over the past year, the central bank has continued to provide policy advice to government on national economic issues, and to make public our views on current economic conditions and broad policy options. with the government ’ s access to market funding severely curtailed, the central bank did not hesitate to recommend a prompt application for assistance to the eu and imf financial support facilities. it provides a window of time during which the government can demonstrate its adherence to a convergent fiscal strategy, thereby helping to rebuild market confidence. to date, the programme is firmly on track. turning to our own financial accounts, the central bank ’ s profit for the year to 31 december 2010 amounted to €840. 9 million. after retained earnings, surplus income of €671 million will be paid to the exchequer. as i said, are also publishing today an annual performance statement ( financial regulation ) for 2010 and 2011. this comprises two main sections – a review of performance in 2010 and a regulatory performance plan for 2011. our key priority remains the resolution of the banking crisis and helping to put the banking system on a sound footing. we are now at your disposal for questions. bis central