central bankers'speeches years, the increase in the size of the international financial services sector and the implementation of our pro - active supervision and inspections model. a substantial proportion of brexit - related queries at this stage relate to a further scaling up of already - sizeable lines of activity or an expansion of the range of activities of currently - licensed financial entities. that said, ireland is likely to become a host to new categories of financial services. accordingly, we stand ready to expand our range of supervisory activity as required, in close collaboration with our international regulatory colleagues within the european system of financial supervision. thank you for your attention. 1 “ the european banking sector – growing together and growing apart, ” lse, 2nd march 2017 ; “ caution should be the life of banking, ” afme board of directors, 22nd march 2017. 2 for an extensive description of our approach to authorisations, see gerry cross, “ responding to the post - brexit environment, ” finance dublin, january 2017. 3 / 3 bis central bankers'speeches

both to firm - specific and systemic risk. similarly, it is essential that regulatory authorities and central banks have sufficient oversight of the operation of financial markets and financial market infrastructures in order to be able to monitor and interpret market shocks and adequately evaluate the desirability of any intervention policies during periods of market distress. accordingly, an important criterion in assessing the stability of a reconfigured european financial system will be the implications for crisis prevention and crisis management policies. in parallel, it is also essential that there are credible recovery and resolution plans for newly - reconfigured financial entities. as financial firms work out strategies to manage the implication of brexit, it is important for the policy community to ensure that regulatory arbitrage does not play a material role. this applies in relation to locational choices and also in relation to options in terms of organisational structures. in relation to the former consideration, the role of the single supervisory mechanism in bank 1 / 3 bis central bankers'speeches supervision ensures that a level playing field will apply in relation to banks. although there is more national autonomy in relation to other types of financial intermediaries and market infrastructures, national regulators operate within the broad framework of the european system of financial supervision and there is significant ( if incomplete ) convergence in supervisory approaches across member states. with a broadly - similar regulatory framework across member states within the eu, the primary focus of firms in relation to brexit planning should be on non - regulatory geographical criteria such as the existence of local clusters of financial expertise, legal systems, the availability of a skilled workforce, the quality of relevant infrastructure, cost factors and related considerations. in relation to the latter consideration, it is worth highlighting the points made by ecb executive board member and vice - chair of the supervisory board of the ssm sabine lautenschlager in some recent speeches. 1 in particular, she noted that the banks under ssm supervision will be closely monitored in relation to the risks that result from different group structures and from relations between different entities of the same group. she also raised the possibility that eu regulations might need to be adapted so that the largest investment firms are supervised in the same way as banks. in addition, she underlined the importance of sufficient local staff, sufficient local risk management and operational independence. finally, it is essential that the resolvability of the euro area entity is demonstrable. taken together, these points suggest that the european regulatory system will suitably evolve in