me to tell you that you are starting from a good place. year after year, the credit union sector comes out on top in studies on corporate reputation. 2 your brand is known, and is strong. i was interested to read that you undertook further research to, " get under the bonnet " of the high ranking, with key contributors being the sector's human, friendly and authentic service. others in the financial system should take note. during the course of 2022, the central bank worked closely with the department of finance as it conducted the retail banking review. the central bank is of the view, and i know the ilcu shares this view, that the credit union amendment bill provides a significant opportunity for the credit union sector to transform into a community based provider of universal retail banking products and services. however, to achieve this, and as the retail banking review suggests, the sector must be prepared to embrace change. this means implementing the significant business model changes required to deliver scale efficiencies, leverage the necessary expertise in a cost effective manner, and to develop greater standardisation across your product range. this transformation will require strong leadership and collaboration within the sector, driven by a strategic plan formulated and owned by credit union stakeholders. over the last number of years, difficult decisions were taken to restructure or transfer undertakings to other credit unions, in order to build resilience or to achieve scale efficiencies. the evidence available to us suggests that these restructures delivered good outcomes, for the sector as well as for members. that is something you should be proud of. restructuring has significantly transformed the asset profile of the sector, providing certain credit unions with the scale needed to deliver future transformation. credit 6 / 9 bis - central bankers'speeches unions that have participated in transfers of engagement are already more active in business lending and home lending, thereby providing an enhanced range of services to their members. and these credit unions are reporting higher return on assets and lower cost to income ratios, and while relatively small at the moment, we would expect that these gains will become more pronounced over time. but the benefits are not only financial. there are operational and governance benefits from completing a transfer of engagement that include a greater pool of potential volunteers with different skillsets and backgrounds. diversity of views, experience and expertise could be an important support in the future evolution of the sector, particularly given the scale of change in financial services. transfers of engagement, where they occur, also bring additional scale

be resilient and survive periods of significant change, it will likely be because the boards and management of firms had the foresight, as well as the ability to take sometimes hard decisions, to ensure their product offering, their unique selling point, had sufficient revenue generating ability to cover the associated costs, and critically to build reserves for future investment as well as to cover risks. many of these risks we already know about, but given the current pace of change in financial services, as well as the level of uncertainty in the economic and geopolitical environment, there are undoubtedly many risks that we do not yet know about, or do not yet fully understand. 4 / 9 bis - central bankers'speeches so in terms of reserves, in periods of significant change and uncertainty, it can never have been more important for me to emphasise that regulatory reserves are minimum standards, not targets, and it is therefore incumbent on boards as well as the management in firms, including in credit unions, to identify and diligently manage risks and threats to their firms'balance sheets, in particular existing and emerging operational and credit risks. credit unions the good news is that credit unions in ireland, both on an overall sectoral basis and individually, are by and large well - positioned from a financial conditions perspective, to not just navigate the current disruption and market uncertainty, but also thrive. average reserves as a percentage of total assets in the credit union sector were 16. 2 % as at september 2023, marginally up on the previous year. the average rate of loan arrears is at the lowest level observed for many years, while the sector loan book has increased to just over €6 billion, a 12 % year - on - year increase. higher interest rates will feed through to higher revenues, as the extended period of unusually low interest rates comes to an end. but as a regulator, and also as an economist, it would be remiss of me not to take this opportunity – with this large audience – to sound a note of caution. we need to be very careful to avoid the trap of believing that because the financial sector in ireland - and indeed more globally - navigated a global pandemic relatively unscathed, that somehow we can similarly navigate the current and expected future turbulence and emerge the other side having achieved the same outcome. to believe this ignores the fact that the monetary, fiscal and regulatory responses during the pandemic were exceptionally supportive, as central banks, governments and regulators took extraordinary