Governor Makhlouf calls for global coordination on non-banks

15 April 2024 Press Release

Central Bank of Ireland

Ahead of a week of engagements at the Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group in Washington DC, Governor of the Central Bank of Ireland Gabriel Makhlouf spoke today (Monday) at a conference on capital markets and financial stability. Governor Makhlouf, appearing on a panel in conversation with IMF and IOSCO colleagues, said it was important for policymakers to continue global coordination to make progress in addressing systemic risks from the non-bank sector.

Following the panel, Governor Makhlouf said: “Globally, the non-bank sector has grown rapidly over the past decade, and Ireland has one of the largest funds industries in the world with around €4.5tn in assets under management. It is playing an increasingly important role in the global financial system and real economy, and is also becoming a more important source of finance in Ireland. This can bring many benefits and support economic growth, but it can also generate, in certain circumstances, risks to the financial system. 

“History has shown us the potential for certain cohorts within the funds sector globally to amplify adverse shocks – we cannot forget the lessons of the global financial crisis, the COVID-induced market shock of March 2020, and the UK’s recent LDI issues.

“It is vital that our oversight of the system keeps pace with this change. We in Ireland believe that this risk requires a macroprudential perspective and collaborative engagement between securities regulators, prudential regulators and central banks.

“In recent years Ireland has played an active role in international efforts to develop solutions to address financial stability risks in the funds sector. We have introduced leverage limits for property funds connected to our domestic economy. We are working with peer regulators in the EU to finalise policy measures in relation to sterling-denominated liability-driven investment (LDI) funds.

“Global and European coordination is needed here. The existing regulatory framework provides a good starting point, but it has not been designed for this purpose and we know that the solutions cannot be “one-size-fits-all”. In many ways, developing and operationalising the macroprudential framework for funds will be more challenging than for banks and we should expect that this will be a multi-year endeavour.

“We need to step back a bit and have a discussion on the framework that would underpin the macroprudential perspective. This is a highly complex issue and we don’t have all the answers, but our Discussion Paper published last year has the specific aim of helping to advance the development and operationalisation of a framework internationally.  I look forward to publishing feedback on the Discussion Paper and to hosting a conference in Dublin in the coming months with a view to progressing this work internationally.

“The Spring meetings offer an excellent opportunity to build and strengthen bilateral relationships, especially with countries that are outside of the Eurosystem but also with senior leaders in the IMF. I look forward to engaging with colleagues this week to further advance this work.”


Governor Makhlouf was speaking on a panel focused on the evolving interactions between Central Banks and Securities Market Regulators. Speakers included Tobias Adrian, Financial Counsellor and Director of the Monetary and Capital Markets Department of the IMF; Jean-Paul Servais, Chairman of the Board, IOSCO; Shigeru Ariizumi, Vice Minister for International affairs, Japan FSA; Madhabi Puri Buch, Chair, Securities and Exchange Board of India; Nellie Liang, Chair, FSB SCAV and Under Secretary at the U.S. Treasury Department.

Feedback for the Discussion Paper on an approach to Macroprudential Policy for Investment Funds closed in November 2023.  A feedback statement will be published in due course in 2024.