may emerge in the consultation. we want to shorten the period of uncertainty as much as possible. accordingly, after making any appropriate refinements ( for example, in relation to first time buyers, and to the potential future use of private mortgage insurance as floated in the consultation paper ), we will move quickly to confirm the parameters of the standing regime. almost all of the discussions that i have participated in at this committee over the past few years have naturally focused on the banks, but of course this is only one element of the central bank ’ s mandate and it is worth reminding that almost 9 out of 10 staff of the central bank are actually engaged in numerous tasks other than the prudential supervision of banks. ( there are, of course, other aspects of banking oversight that staff deals with, such as the consumer protection and conduct of business aspects of bank regulation ). indeed, the microprudential banking supervisory decision making now largely passes under the control of the eu single supervisory mechanism ( ssm ), which came into operation on november 4. the ssm does not, however, mean less work for us, but rather more work, inasmuch as the procedures of the ssm require a further expansion of our bank supervisory staff as well as a reorganisation of their function. indeed, after three years during which staffing levels have not risen, the central bank now needs to increase staff numbers again, not just because of ssm, but also because of the additional complexity of new international regulations covering non - bank financial services ( which form the heart of the ifsc ), new rules on bank resolution and other new mandates. ( much of the costs here are recovered from the industry ; indeed all regulatory costs could be so recovered, instead of having the effect of eating into the central bank ’ s surplus income to be transferred to the exchequer ; and the central bank has suggested this to successive governments. ) having already absorbed a sizable increase in staffing during 2010 – 11, we are currently engaged in an extensive review of our internal organisation to ensure the conditions for steady improvements in the effectiveness of our work, which relates to essential matters which, especially when they work well, are not obviously visible to the general public. the review is examining a range of issues including internal structures, career paths and internal processes. i expect significant beneficial changes to both organisational structures and practices within the central bank as a result of the review. our effectiveness will be enhanced by our carefully designed and efficient headquarters building at

private notes which served as currency, and they often had a monopoly over such note issue. ” 8 money is a symbol of stability and central banks play an important role in maintaining this stability. it may be obvious but it ’ s worth saying : the stability of money plays a critical role in the stability of society. the role of money ( as a store of value, a unit of account and a medium of exchange ) is also an important instrument in how we connect with each other, through trade, commerce, and our everyday interactions and hence in building social capital. in more recent history, the later wave of central banks were established at the turn of the 20th century and brought together the many instruments that people were using for currency and to provide financial stability. 9 while central banks at this time were constrained by the gold standard, they “ learned to act as lenders of last resort in times of financial stress — when events like bad harvests, defaults by railroads, or wars precipitated a scramble for liquidity ( in which depositors ran to their banks and tried to convert their deposits into cash ). ” 10 as we chart the history of central banks, we can see their critical role providing stability, both monetary and financial. i will discuss considerations beyond monetary and financial stability later in my remarks. one point i would like to reiterate now is who central banks serve. this is an important anchor when thinking about the role of central banks in building ( or rebuilding ) social capital. since becoming governor of the central bank of ireland, a guiding principle for me has been a phrase from the original legislation establishing the central bank of ireland in 1942. echoing the state ’ s constitution, it stated that the central bank ’ s “ constant and predominant aim shall be the welfare of the people as a whole ”. 11 but i will return to that later. institutions matter taking a step back, if social capital is ultimately about how we connect with one another, it ’ s clear that institutions matter for building social capital. and central banks, as important institutions of the state, play a critical role. in fact, i suggest that central banks are part of an institutional ecosystem that is interconnected, notwithstanding that the individual components may act independently. we do not act in a vacuum, and we should not confuse independence with isolation. douglass north defined institutions as the “ humanly devised constraints that structure political, economic and social interactions ”. 12 economists from adam smith, to ronald coase, man