Acceptance speech 2025 Pádraig Ó hUiginn Award - Philip R. Lane
Central bank: ecb | Type: speech | Date: 2025-10-23

SPEECH

Acceptance speech 2025 Pádraig Ó hUiginn Award

Remarks by Philip R.

Lane, Member of the Executive Board of the ECB, on the occasion of the conferral of the 2025 Pádraig Ó hUiginn Award Dublin, 23 October 2025 It is an honour to receive the Pádraig Ó hUiginn Award.

Pádraig Ó hUiginn and the previous recipients of this award (John Bruton, Catherine Day and Michael Noonan) have all contributed to the development of Irish and European policy frameworks for the financial services sector.

A successful financial services sector requires the sound underpinning provided by high-quality public institutions and sustainable public finances.

In particular, the financial services industry is characterised by distinct complementarities between the private sector and the public sector: commercial providers of financial services benefit from a public regulatory and supervisory framework that maintains prudential standards, protects consumers and underpins financial stability.[1]As the severe costs of the Irish banking crisis so painfully demonstrated, it is neither in our collective interest as a society nor in the interest of the financial services sector to be complacent about the essential contribution of financial regulation to the long-term health of the sector.

At the same time, the regulatory and supervisory system should neither deter new entrants nor inhibit the capacity of the financial services sector to innovate and roll out new technologies.

In adapting to a rapidly-digitalising financial system, it is in the shared interest of regulators and financial services firms to make sure that this digital transition takes place without putting at risk the essential features of a well-regulated financial system.

In the context of financial digitalisation, let me also highlight that the European Central Bank (ECB) is working hard to make sure that central bank money – which provides the underlying foundations for the entire financial system – is also modernised.

In particular, the digital euro would provide a digital version of central bank money, maintaining the essential feature of the monetary system that commercial bank money is fully interchangeable at par with central bank money.[2]

In terms of wholesale transactions, the ECB has also approved a plan that will enable distributed ledger technology (DLT) transactions to be settled using central bank money.[3]The initiative follows a two-track approach: the first track “Pontes” provides a short-term offering to the market – including a pilot phase – and the second track “Appia” focuses on a potential long-term solution.

The decision is in line with the commitment of the Eurosystem to supporting innovation without compromising on safety and efficiency in financial market infrastructures.

In addition to the digitalisation agenda, let me also highlight another fundamental and, indeed, inter-connected challenge for the financial services sector: it is clear that geopolitical developments have made it all the more urgent to make substantial progress on integrating the European financial system.[4]In particular, it is critical to complete the savings and investments union and the banking union to an ambitious timetable.

A more integrated and more fully developed European financial system is in our collective interest.

An integrated European financial system will: improve market efficiency; offer greater opportunities to European firms to raise both equity and debt financing; and, through the benefits of scale economies, make it easier for European households to hold diversified financial portfolios, while also lowering transaction costs.[5] In addition, an integrated financial system will make Europe more attractive for global investors, allowing Europe to gain from an improvement in the financial “terms of trade”.

In terms of public policy objectives, an integrated European financial system will also support the large-scale funding needs of the green transition and the scaling up of the European defence industry, including through greater scope for joint funding of pan-European initiatives.[6]

These topics are high on the agenda for today’s European Council and Euro Summit meetings in Brussels, reflecting the political urgency in building an integrated-but-open European digital-ready financial system that ensures sovereignty and resilience, improving the performance of the European economy and making Europe a more attractive destination for global investors.

In terms of the contribution of public policy to the development of financial services, the “Directive Principles of Social Policy” section of the Constitution of Ireland requires “That in what pertains to the control of credit the constant and predominant aim shall be the welfare of the people as a whole”.

See Lane, P.R. (2025), “The digital euro: maintaining the autonomy of the monetary system”, keynote speech at the University College Cork Economics Society Conference, Cork, 20 March; Lane, P.R. (2025), “Essay on the digital euro”, contribution to IMF Finance & Development Magazine, 3 September; and the digital euro web page on the ECB’s website.

ECB (2025), “ECB commits to distributed ledger technology settlement plans with dual-track strategy”, press release, ECB, 1 July.

The Draghi report highlights financial integration as intrinsic to the overall reform programme needed to boost the European economy.

See also Lagarde, C. (2023), “A Kantian shift for the capital markets union”, speech at the European Banking Congress, Frankfurt am Main, 17 November; Lagarde, C. (2025), “Europe’s “global euro” moment”, The ECB Blog, ECB, 17 June; and Lagarde, C. (2025), “Turning openness into strength: the moment of the euro”, speech at Business France event, Paris, 7 October.

For a comparison of the financial portfolios of European and US households, see Lane, P.R. (2025), “The Asset Holdings of Euro Area Households”, slides, presentation to the Irish Association of Investment Managers, Dublin, 9 October.

For a discussion of joint borrowing options, see Lane, P.R. (2025), “The euro area bond market”, keynote speech at the Government Borrowers Forum, Dublin, 11 June.