‘ charting the course - leading nancial services through complexity and change ’ - remarks by deputy governor sharon donnery at financial services ireland annual dinner 17 november 2022 speech good evening. thank you to the executive board of financial services ireland for the invitation to speak to you this evening at your annual dinner. it is a pleasure to have an opportunity to share my thoughts with you tonight. 1 we all face a challenging time charting a course through a lot of uncertainty and a lot of complexity in the global economy. the extent of the risks to the nancial system has increased, as has the vulnerability of certain parts of the system to shocks. this requires us all – leaders in the nancial system – whether in the public or private sphere, to recognise and respond to these challenges. in my remarks tonight, i want to explain how i see the macroeconomic outlook and the potential for volatility in the macro - nancial environment. looking at the changing nancial services landscape, i will set out how we, in the central bank of ireland, will deliver our mandate through these challenges, and what we think can be done by you – leaders of rms and businesses – to best manage and mitigate the risks and challenges. but i won ’ t only speak of doom and gloom. i believe that by recognising the challenges we face and the critical role nancial services plays in meeting the needs of consumers and the wider economy, we can work far more effectively together to achieve our respective objectives and realise some of the opportunities that change brings. macroeconomic outlook – complex and uncertain complex and uncertain is a good way to describe the outlook economy. russia ’ s war against ukraine, the energy crisis, the monetary policy response to tackle in ation, the risk of recession, the state of labour markets and supply chains as well as the ongoing impact of china ’ s approach to managing the pandemic have created a very uncertain economic path. this uncertainty has made the job of central banks and others forecasting economic developments difficult. i was in washington last month for the imf / world bank annual meetings and safe to say people were pretty downbeat about the economic outlook for the global economy. with all the usual caveats, the imf ’ s global growth forecasts have been lowered to 2. 7 per cent growth next year2, with euro area growth projected to see about half a percentage point. at the central bank of ireland, we expect the uncertainty in energy markets to slow growth in ireland

, the evidence behind decisions and the motivations of the other. in this way, the financial services conference, our industry forum, the retail payments forum and our climate and sustainable finance forum give structure to those conversations. it also involves, for us, regular and deep engagement with policy makers at home and abroad. for our part, we will continue to enhance our processes, for example, around our gatekeeping role, to encourage early engagement, including through our innovation hub, and to provide clear published guidance. we have the humility to know that no - one gets it right all the time. i welcome feedback, and i encourage you to provide feedback to us. we are always open to dialogue and discussion but not to be less demanding when it comes to our supervision. how financial services can respond to change so now turning to the challenges for firms and all of you working in financial services. what do we expect regulated financial services firms to do in response to the current environment? the foundations are familiar to you. in a very uncertain and increasingly complex environment, firms need to ensure that they have sufficient resources, sustainable business models and effective risk management to mitigate against the risks that they face. this obviously differs across sectors and firms. but the key thing is for firms, and their leaders at the board and in management, to be dynamic in their understanding of the risks faced in the context of a rapidly changing environment. to understand risks in the system and in the firms that they run, people in leadership positions must be fit and proper. without this, the firms, the system and end - users are exposed to unnecessary harm. a culture where there is a commitment to high standards and values which shape the behaviours and mind - sets within a firm is important. risk management and control frameworks should be appropriate to the nature, scale and complexity of the business and where firms are experiencing material and rapid growth, their risk management framework must keep pace with the growth. these criteria, applied proportionately, are the building blocks of a resilient and trustworthy financial system. i think they are easily understood and reasonable. in the current environment, these principles not only hold true, but are more important than ever, and are foundational for firms and the wider sector to withstand and address challenges ahead. conclusion - a leadership challenge a leadership challenge for my colleagues and i in the central bank is to regulate in a way that is balanced and proportionate, effective and fair and delivers the right outcomes. we operate