i want to mention two : the uk ’ s departure from the eu and market - based finance. the uk ’ s departure from the eu following the uk ’ s exit from the eu on 31 january 2020, negotiations are currently underway to try and conclude a free trade agreement ( fta ) between the parties before the end of 2020. if there is no agreement on a new fta and no extension of the current transition period then the eu and uk could move to trading on wto terms from january 2021. in previous analysis, the 3 / 6 bis central bankers'speeches central bank has discussed the risks to the economy from future potential post - brexit trade arrangements. 3 given the extensive linkages between ireland and the uk, the uk ’ s withdrawal from the eu will affect the irish economy through a range of channels. with the uk exiting the eu customs union and single market, trade between ireland and the uk will not be as frictionless as today. and while the successful conclusion of an fta could eliminate tariffs on most eu - uk trade, other frictions would arise that would make trade in both goods and services more cumbersome. these non - tariff barriers include the possible need to manage new import and export formalities, including customs and security declarations. trade in agri - food products – particularly important in an irish context – could also be subject to new additional checks and inspections. in the case of a wto arrangement these effects on trade would be compounded by the imposition of tariffs. it is important to note that new tariff and nontariff barriers would negatively affect both importing and exporting. over 20 per cent of imports of irish - owned firms are either completely or very highly reliant on imports coming from the uk, the majority of these imports are intermediate inputs used for further production in ireland. 4 ( figure 8 : effects of different uk withdrawal scenarios on irish output ) in addition to disruption to trade flows, the uk ’ s departure from the eu could affect the economy through other channels. in the short - run, the ongoing uncertainty over nature of the uk ’ s future relationship with the eu after the transition period could cause firms to delay investment spending. heightened uncertainty could weigh on sentiment more generally, dampening spending by households. exchange rates and financial markets could also be affected. in the long - run, the uk ’ s departure is expected to have negative effects on the uk economy through lower productivity and weaker investment. slower uk growth arising from

patrick honohan : risk – banks and government address by mr patrick honohan, governor of the central bank of ireland, at the international centre for monetary and banking studies, geneva, 15 march 2011. * * * from the start of the global crisis, perhaps the most salient feature has been the jump in the appreciation of risk and in risk aversion. to be sure, in the previous years, the reverse was true : market appetite for risk was very high and risks were under - estimated. indeed, i have long maintained that credulity in mechanical risk management models is likely to have been the most important of the several factors that were at the root of the imbalances and excesses that occurred in the run - up to the crisis. believing that their risk models – and the financial engineering built on these models – worked better than they did ( and lured by the high rewards for assuming risk ), market participants piled into trades that were much riskier than they believed. the revulsion that set in once the shortcomings of key parts of the financial engineering edifice, and the associated failures of risk management, were revealed to its users also played a part in the speed with which the collapse occurred in the leading markets in september and october of 2008. accordingly, some of the pricing changes that then occurred represented a normalisation, in that risk premia for many classes of assets had been too low, but for a while there was an overshoot. since then, normality has returned to many key markets. indeed, some observers are fretting about the growing risk appetite that begins to be evidenced by some securities market prices in recent months. but for other asset classes, normalisation has not occurred ; risk premia have not narrowed. indeed they have widened. one conspicuous example is the pricing of peripheral euro area government debt, including the case of ireland, which is best known to me and which, when the dust has settled, is likely to be the country case most studied by future generations of students of this crisis. i could dramatise this situation by listing the emerging countries which have the same sovereign debt ratings and yield spreads as the european peripherals. but that is a rather painful exercise and i will dodge it on this occasion. by the way, it is worth recalling that, before the crisis, spreads on euro sovereigns were rather insensitive to the ratings. not so today. market participants obviously want to protect themselves against the risk that