deficiency ( as i will mention below ), by and large, the evidence is consistent with a process which is working more or less to target. a number of key issues emerged in our latest audit, all of which have been communicated to the banks to address. the main issues include : • in some banks, communications with borrowers on proposed sustainable solutions were too frequently verbal in nature, and they did not provide sufficient clarity to borrowers on what the ultimate solution proposed was. • there is evidence that despite the requirements for proposed solutions to be sustainable in the long - term, short - term loan modifications are still too prevalent in some banks. • affordability assessments were often not evident on files reported as sustainable. • in a limited number of cases, we found issues of potential breaches of the code of conduct on mortgage arrears ( ccma ) relating to the timing of the letters in advance bis central bankers ’ speeches of legal proceedings for repossessions commencing. the central bank will commence a review of ccma compliance in the second half of the year and these findings will be taken into account as part of this review. we are communicating the specific issues and actions identified for each bank, including the actions arising in from our wider insights into the effectiveness of the specific banks ’ strategies to resolve mortgage arrears. while these issues are significant, and it is important that action is taken to address them, they should not impede progress on dealing with arrears cases. we expect the banks to continue to progress cases to sustainable and long - term solutions. we will continue to review the banks ’ operations and strategies and where there are deficiencies or we think things should be done better we will let them know. addressing mortgage arrears was never going to be a short - term issue. we have always believed it was going to take time to tackle the issues and take a number of years to work out. we are now at a point were progress is evident and, notwithstanding specific areas for improvement by banks, we are moving along the right path. mortgage arrears remain a significant priority for the central bank and we will continue our programme of intensive oversight of the banks ’ progress. bis central bankers ’ speeches

turning now to the irish economy, it is possible to filter the noisy headline data ( of which more later in this speech ) to identify a range of domestically - focused aggregate variables including employment, consumer spending and a suitably - adjusted measure of investment to indicate that the irish economy is performing well. although living standards and employment remain below pre - crisis levels, much of the ground lost during the crisis has been recovered over the last three years. even allowing for a material adjustment for the negative impact of brexit ( of which more later in this speech ), the bank ’ s latest quarterly bulletin still conditionally projects output growth rates of 4. 9 percent and 3. 6 percent for 2016 and 2017 respectively, with unemployment declining to 7. 2 percent next year. at the same time, the legacy of high public and private sector debt levels and the sensitivity of small, highly - open economies to international shocks means that there remain considerable downside risks to this central projection. the imf ’ s recent article iv report provides a valuable independent risk assessment, together with a range of recommendations to mitigate these downside risks and support a robust and inclusive medium - term growth strategy. bis central bankers ’ speeches financial sector assessment program ( fsap ) the imf has also published its fssa report for ireland. the fssa report is based on a comprehensive financial sector assessment program ( fsap ), which is an in - depth exercise to assess the resilience of the financial sector, the quality of the regulatory and supervisory framework and the capacity to manage and resolve financial crises. the fsap started in september 2015 and involved extensive engagement with the central bank, department of finance, ecb and other financial sector stakeholders. to give you a sense of the scale and scope of the assessment, the third and final mission visit in march 2016 involved ten imf staff on the ground in dublin, more than 130 meetings in dublin, frankfurt and london and the submission of over 300 documents, many of which were hundreds of pages long. the conclusion of the fsap ( and the publication of the fssa ) marks an important milestone for ireland, since it is the first such review since the financial crisis and provides a timely assessment of our progress against international standards and best practice. in addition, it represents a further marker of the re - normalisation of ireland ’ s relationship with the imf. the bank welcomes the broadly - positive assessment, which reflects the efforts of the irish authorities in recent