derville rowland : change and challenges - responding to uncertainty, transforming for the future and driving innovation remarks by ms derville rowland, deputy governor of the central bank of ireland, at the association for financial markets in europe ( afme ) 8th annual european compliance and legal conference, london, 23 september 2024. * * * good afternoon. many thanks to afme for the invitation to speak at this conference again this year. today i will focus on the regulatory outlook for financial services in europe and ireland in the context of a rapidly changing, more uncertain and ever challenging world. the old adage, attributed to harold wilson, that " a week is a long time in politics " is equally applicable in many walks of life – but it has often been the case in financial markets. the last period has been no different and week to week we have seen things change rapidly. at the start of august we saw a turbulent trading period following fears of an imminent us recession. more recently, we have seen markets respond to the fed's half - point interest rate reduction and the bank of england and bank of japan hold rates steady. while conditions have improved since, significant downside risks remain. in particular, geo - political events remain potential sources of fragility over the coming months, including uncertainty around electoral outcomes, continuing conflict in the middle - east and ukraine, turbulent economic conditions. closely linked to the issue of geopolitical tensions, there is now heightened focus on the centrality of cyber risk and operational resilience. the crowdstrike cyber incident in july, while contained early and brought under control, caused significant disruption and highlighted the fragilities in the system. cyber risk, and the link to geopolitical tensions, has been flagged by esma, eba and eiopa and are increasingly recognised as a significant and likely risk by regulated firms. positively, we have also seen the european supervisory authorities ( esas ) and the eu agency for cybersecurity announce the signing of a multilateral mou to strengthen their cooperation and information exchange on cybersecurity risk in the financial sector. in light of heightened cyber risks, the importance of operational resilience remains paramount. the implementation of the digital operational resilience act ( dora ) remains a key focus for regulators and firms. digital operational resilience is a fundamental underpinning of a resilient and well - functioning financial system supporting the economy and serving the needs of citizens. that said, ensuring

excluding credit unions ), certain insurance undertakings and investment firms and incoming third country branches of these firms. taking into account nature, scale and complexity, it is intended to apply a proportionate approach to low - impact - rated in - scope investment firms and incoming third country branches. 7 in this regard, a reduced number of prescribed responsibilities are applicable to such firms. all other elements of the sear apply, including statements of responsibilities and the management responsibilities map. the central bank will have power via regulations to rollout the sear to other sectors in due course. it is our intention to increase the scope of application of the sear over time, with lessons from the initial roll - out to be incorporated as the scope is extended. in the meantime, our view is that there is much in the spirit of the sear that firms not initially falling within scope should recognise as aligned with good quality governance. responsibilities we have designed the framework such that, for consistency and coherence, the roles to which the sear applies at inscope firms align with those existing pcf roles to which the f & p regime applies. as is the case under the f & p regime, firms will not be required to create new roles. therefore, while bringing enhanced clarity, the sear is not expected to alter the existing governance structures of well - run firms. there are two main types of responsibilities imposed under the framework : 1 ) inherent responsibilities : these are the responsibilities which automatically align to any given pcf role at an in - scope firm. our proposed description of such inherent responsibilities is set out in the draft sear regulation. 2 ) prescribed responsibilities : these comprise a list of responsibilities which it is proposed that each in - scope firm must allocate among individuals in pcf roles. again, our proposed list of prescribed responsibilities is set out in the draft sear regulation. while firms must allocate all applicable prescribed responsibilities among pcfs at in - scope firms, the central bank does not intend to be overly prescriptive in terms of the allocation of prescribed responsibilities to specific pcf role - holders. this approach gives firms the flexibility to allocate responsibilities in a manner that accommodates different business models and organisational structures. non - executive directors one aspect that has generated some debate already is the proposed inclusion of non - executive directors ( including independent non - executive directors ) within the scope of sear. we have given this careful consideration. it is important to recognise that non - executive directors