welcome address luigi federico signorini, deputy governor of the bank of italy cepr international macroeconomics and finance ( imf ) programme meeting webinar, 10 - 11 december 2020 ladies and gentlemen, it is my privilege to open this meeting of the cepr ’ s international finance and macro group. in these unusual times, one must forgo the benefits of informal, realworld interaction. we are now all of us well accustomed to making the most of virtual discussions. nevertheless, i do hope that we shall soon be able, and have the opportunity, to welcome you here in rome in person. globalisation is one of the key themes for this group. for over two decades, starting from the mid - eighties, the world saw cross - border movements of goods and ( especially ) capital increase apace, much faster than gdp. it was not, of course, the first instance of such a sustained process. it had happened during the ‘ belle epoque ’ of globalisation, between 1870 and the outbreak of the first world war, and again after the second. often, increased exchanges went hand - in - hand with accelerating economic growth, the dissemination of productivity - enhancing technology, the spread of new cultural models, and an internationally open mind - set, especially among the elites — in a knot of reciprocal causation links that is not easy to disentangle. globalisation was even stronger last time. at the onset of the global financial crisis, world exports amounted to more than a quarter of global gdp, against 13 per cent just before the great war. even more importantly, this time globalization went beyond europe, north america and other traditionally advanced economies, unleashing powerful forces for economic development in much of continental asia, for instance, and contributing to an astonishing reduction in global poverty. after embracing globalisation, each in its own way, the two largest countries in the world started a process of convergence with advanced economies that scarcely anybody would have thought possible fifty years ago. many other economies did the same. institutions and the rules for multilateral cooperation, strengthened after the end of the cold war, accompanied and supported this process. eras of globalisation, however, seem to end abruptly. the belle epoque waltzed unconscionably into the great war. the post - ww2 era came to an end with the dissolution of bretton woods, the oil crisis and stagflation. the latest period of globalisation closed with a global financial crisis

volatility of short - term interest rates around a given level of official interest rates. i would also emphasise that the actions undertaken were not in any way motivated by an attempt to mitigate losses for those who had taken excessive credit market risks. rather, the substantial injections of liquidity by central banks were intended to contribute to stability in the interbank market at a time of significant strain. the situation in ireland in the recent financial stability report of the central bank and financial services authority of ireland, we have concluded that while the risks to financial stability have increased since last year, the stability and health of the banking system here remain robust when assessed by the usual indicators of financial health such as asset quality, profitability, solvency, liquidity and credit ratings. however, like their international peers, irish banks have been operating in an environment where liquidity is not as readily available as heretofore. in addition, notwithstanding the fact that the larger institutions have diversified their businesses outside the irish economy, the banking sector is operating in an economy where growth will be slower by comparison with recent years. investor sentiment towards the banking sector globally has been negative in recent times and irish banks have not been immune from this. however, the current situation and outlook for irish banks, based on an assessment of developments so far, is positive. firstly, the sector's shock absorption capacity has been largely unaffected by the turbulence in international financial markets. a survey of the exposures of irish banks published in the financial stability report shows that the domestic banking system has no significant direct exposures to us sub prime mortgages and essentially negligible exposures through investments and through links with other financial companies or special purpose vehicles. in addition, the exposure of domestic institutions to hedge funds and private equity is very low by international standards. secondly, given the extent of the disruption to normal market functioning internationally in recent months, it is inevitable that access to liquidity in the interbank market by irish banks, like all banks, would be affected. however, the comprehensive liquidity framework within the eurosystem and the significant volumes of collateral held means that irish banks are well positioned to access eurosystem liquidity. also, a fuller assessment of the funding patterns of irish banks indicates that there is a significant medium - term element to much of their funding, as well as a relatively wide range of funding options available to them. finally, our stress - testing of the banking system and our extensive financial stability analysis indicate that irish