And so this is why we need a different perspective for the fund sector – a macroprudential perspective – to address this systemic risk posed by these funds. In my view we need to develop and implement a macroprudential policy for non-banks, including investment funds, to ensure market participants are resilient to market shocks, and so avoid damaging amplification mechanisms.
The Central Bank of Ireland has started to develop macroprudential policy for the nonbank sector, starting initially with the investment fund sector because of its size, growth  2/3  BIS - Central bankers' speeches  and interconnectedness, particularly with the domestic economy in this instance. We recently introduced limits on leverage and additional Guidance to limit liquidity mismatch for Irish property funds.