will be reflected in lower price to book ratios ; banks ’ mistrust will be reflected in elevated interest rates to compensate for higher risk ; potential new entrants and consolidators mistrust will be reflected in the reduced likelihood of entering markets with higher npls, and so on. authorities, including supervisors, therefore have a critical role in ensuring trust within the system. the ssm is close to three years in operation. it is still a relatively new institution. much has been 1 / 7 bis central bankers'speeches done to establish its reputation as an effective, intrusive, and independent supervisor. this trust is hard - earned and easily lost. by taking the necessary decisions, by doing the right things we will continue to earn the trust of the european public and market participants. and this includes taking firm action in relation to npls. but it is not easy. we must consider financial stability issues, and perhaps less obviously for some prudential supervisors – but crucially nonetheless – consumer protection matters. prudential supervision and consumer protection are inherently interlinked and mutually selfreinforcing. poor outcomes for consumers are poor outcomes for the banking system. although the ecb does not have an explicit mandate for consumer protection, many national competent authorities – such as the central bank of ireland – do. even were that not the case, it is important that intrusive prudential supervision should not come at the cost of the consumer. and this is particularly relevant for action on npls, which by its very nature relate to dealing with distressed borrowers – that may, for example, be at risk of losing their family home, or small enterprises that are providing local employment. indeed, ensuring that borrowers are protected remains at the heart of the central bank of ireland ’ s approach to npls. this is a fundamental aim in its own right, but it is also important in rebuilding trust in the irish financial system more broadly following the crisis. 3 i am cognisant that there is much more to be done in this regard, and the remaining high level of npls is a significant drag on rebuilding this trust across the system. the irish experience with npls this brings me to our own experience in ireland. the irish banking sector has been transformed since the start of the crisis. intensive supervisory focus and pressure coupled with improved economic circumstances continue to drive reductions in npls. nevertheless, npls levels remain elevated and their sustainable resolution remains a key supervisory priority. this

lv ] see financial stability board global monitoring report on non - bank financial intermediation 2018. [ lvi ] based on the financial stability board definition. as at the first quarter of 2019, the total assets outstanding of clo vehicles domiciled in ireland stood at €78bn, up more than €8bn since end - 2018. [ lvii ] see coates, d., daly, p., keenan, e., kennedy, g. and mccarthy, b. 2019. who invests in the irish commercial real estate market? : an overview of non - bank institutional ownership of irish cre. central bank of ireland economic letter, vol. 2019, no. 6. [ lviii ] ibid. [ lix ] corporate loans are issued to ( often ) highly - leveraged firms, prior to being bundled together by the issuing lender ( s ) and divided into investment tranches which are rated and sold separately. [ lx ] see mccarthy, b., elbay, t., daly, p. and cima, s. 2019. the who ’ s who of irish collateralised loan obligations. central bank of ireland, behind the data. [ lxi ] see department of finance announcement for further details. [ lxii ] see nyberg, p., 2011. misjudging risk : causes of the systemic banking crisis in ireland. ministry of finance, dublin, 2011. [ lxiii ] keynes, j. m., 1936. the general theory of employment, interest, and money. [ lxiv ] shiller, r. j., 2019. narrative economics : how stories go viral and drive major economic events. princeton university press. ©2019 central bank of ireland