global financial market, being more connected with market participants – whether firms, other regulators, consumers and investors – is essential to better understand risk, and to support agility and foresight in how we regulate ; proportionate, because we want regulation to address the harm or failure on which it is aimed without causing unintended consequences. if regulation goes further than required, it creates distortions that can contribute to sub - optimal outcomes. so there needs to be an effective and disciplined consideration and weighing of the costs, benefits and trade - offs involved in any regulatory intervention ; predictable, because consumers and firms need to understand what the central bank is trying to do, and what it is we expect others to be doing. our expectations of firms should be clear so that they can implement regulatory requirements in an orderly manner and of course it is important that investors and consumers have the basics of financial literacy ; transparent because building trust in the financial system requires that market participants are able to see that regulators are doing their job and regulations are working as intended. again, i want to be clear that the phrase ‘ market participants ’ includes firms, consumers and investors ; and, last and very much not least, agile, because the financial system has shown us that it can change quickly, that it is changing quickly and that it will continue to change quickly. regulation needs to adapt to a changing risk environment at a similar pace. there are of course challenges and trade - offs to make in delivering effective regulation. being agile may mean less predictability if you define ‘ predictable ’ as meaning a slowness to action. but there is a difference between a responsive regulator and a reactive regulator, and a balance must be struck between regulatory rigidity and regulation as something that can be changed on a regular basis17. regulation needs to move faster with the risk environment and innovation that we all see taking place every day. regulated firms also need to be agile in implementing regulatory requirements. firms show their attitude to regulation, to risk and to consumers through their actions as is seen on a day to day basis by our supervisors. this ‘ frontline ’ provides an important feedback loop when we think about regulation18. let me provide a current example. protecting the interests of consumers is at the heart of financial regulation. but how to do this in a way that on the one hand is both proportionate and predictable, and on the other is effective to ensure that the community has confidence that firms will act firmly in consumers ’ best interests, remains a challenge. our

recently published discussion paper on the review of our consumer protection code has this question at its centre. and of course, in embarking on this review we recognise that there are strong regulatory requirements in place to protect consumers of financial services, including in our existing codes and both domestic and eu law. non - bank financial intermediation being forward - looking may mean taking a different approach to how we regulate. in particular, in my view we need to rethink the regulation of the non - bank sector. and given the scale of the industry in ireland, it is worth saying a few words specifically on investment funds. traditionally, the regulation of investment funds has been largely about developing and enforcing investor protection rules. but we have to learn from history. the lessons of the global financial crisis, the covid - induced market shock of march 2020, and the uk ’ s recent ldi issue are clear. the sector is too big to ignore. that ’ s self evident. the financial stability risks are self - evident. the risks to investors, consumers and the community as a whole are self - evident. the ‘ dash for cash ’ and ldi issue were ‘ near misses ’. they clearly show the systemic risk that funds can generate via their collective actions, as nobel laureates diamond and dybvig told us. a stable financial system is a necessary pre - condition if we are to protect consumers and investors. and we – policymakers and regulators – need to accelerate steps to ensure that our frameworks do that in a comprehensive way. we need to be agile, forward - looking and connected as we look to address this. over recent years we have played a leading role in international efforts to develop solutions to address financial stability risks in the funds sector. where solutions are developed and available, we should move quickly to implementation. here in ireland, we are planning to introduce leverage limits for property funds connected to the domestic economy, but we cannot tackle the wider issue of systemic risk alone. global and european coordination is needed here, and, i suggest, urgently. regulators need to approach the issue by asking themselves how much stress it would take for different sectors to cause serious disruption to the financial system. as i said, consumer and investor protection is founded on the existence of a stable financial system and regulators need to be aware of the big picture, avoiding the temptation to focus on narrower and perhaps more straightforward ways of providing that protection. tackling systemic risk requires a macroprudential perspective that targets the