Mr. Oliver Gilvarry:

As my colleague has outlined, shadow banking has been subject to significant debate since the crisis in 2008. The Financial Stability Board has done significant work. The first question the Chairman asked concerned shadow banking and the entities involved. The Financial Stability Board has urged that we look at activity rather than the entity involved. It is a question of determining whether it is shadow banking activity, rather than whether an entity is engaged in shadow banking. The board has done work in which the largest 20 economies have been involved. An issue arose concerning the question of whether one should try to identify whether there was credit facilitation, or whether an entity was providing credit, and whether there were maturity transformations. A bank takes in deposits on a short-term basis - through a current account or a money on demand arrangement, for example - and that money is lent for mortgages or to finance businesses over five, ten or 15 year periods. One examines these types of activity and ascertains what types of entity are involved. The money market funds sector does fall into this context in Ireland because it is acting like a bank in a sense. The securities the funds are buying are financing businesses or banks. Therefore, it is not just bank paper that money market funds are purchasing; they also purchase paper issued by corporates. Again, it is what one would call the real economy.