Low bond yields in industrial countries caused funds to flow into alternative investment opportunities and into emerging markets. Despite a recent warning by the Bank for International Settlements (BIS) in its quarterly bulletin that emerging-market assets might be becoming overvalued, investors continued to favour these assets.
In relation to the prudential regulation of banks, there has been considerable progress in developing a banking union in Europe. In particular, the Single Supervisory Mechanism (SSM) of the ECB is now responsible for supervision in the euro area and is the direct supervisor for the largest banks, including the main Irish-resident banks.