had no information at hand indicating that any of the banks were about to experience losses far in excess of their capital reserves. what i have suggested as the best course of action ( given the lack of such information scenario 2 ) – buying time for negotiation with partners, seizing control over the two failing banks, and limiting the scope of the guarantee – could hardly ( unless those negotiations had proved remarkably successful ) have reduced the direct fiscal bill by more than a few billion – a fraction of the actual damage. the alternative ( under the hindsight scenario 1 ) of bailing - in some of the bondholders and depositors of anglo and inbs would have imposed additional disruption to economic activity and capital formation which would have offset a lot of the savings to the state from not paying the creditors. i conclude that the need for “ austerity measures ” : the scale of tax increases and expenditure reductions that have proved necessary since, could have been reduced somewhat, but not all that much, by anything done at the end of september 2008. maintaining perspective as i have remarked recently, the boom and the bust both damaged our economy. the boom, and the decisions that were taken during it, meant that ireland had to adjust down from living standards that could never have been sustained, with sizeable and capricious shifts in the distribution of wealth. the style of banking in ireland, its regulation and broader economic policy were strongly influenced by comparable styles adopted at that time in countries often used as exemplars for irish decision makers, and in particular the us and uk. but the scale of the excesses in ireland put its banking crisis in a different league ( though not as bad as iceland ). the extent and nature of the guarantee decision frustrated subsequent efforts to minimise the costs and speed the recovery. but the bulk of these costs could not have been avoided by a different course of action on the night of the guarantee. bis central bankers ’ speeches

sector survey on outsourcing conducted by the central bank, identified issues across the life - cycle of outsourcing arrangements and suggests that outsourcing is not being considered a core priority of many financial services firms. some of the most critical observations from the survey, which tie in with findings from on - site inspection work, relate to poor governance and controls around the risk assessment and management of outsourcing, inadequate monitoring and reporting, failure to consider third - parties in business continuity plans and tests, and a lack of exit strategies or contingency plans should page | 6 the need for resilience in the face of disruption : regulatory expectations in the digital world the firm need to find a new service provider or bring the service back in house. these issues are more concerning given that a large proportion of outsourcing arrangements were reported to involve sensitive customer and business data, including to cloud service providers, and that 75 % of firms outsource all or part of their information technology. x with all outsourcing arrangements, boards and senior management must understand that they are placing the resilience of their firm into the hands of a third - party and while they may be able to monitor the service during normal operation, when something goes wrong, they are reliant on someone else to fix it. some firms might seek to take comfort from the fact that they outsource to a parent or sister group company rather than a third party, but, as has been seen with a number of high - profile events, firms cannot always rely on the parent to provide uninterrupted service. boards and senior management need to understand where their firm ’ s systems and data sit on the group priority list should something go wrong. cyber security risk as i am sure you are aware, october is cyber security awareness month. xi but cyber security and cyber resilience is not something we should focus on for just one month of the year. it requires vigilance and attention, day in, day out. former cisco ceo john chambers once said, “ there are two types of companies : those that have been hacked, and those who do not yet know they have been hacked. ” xii the cyber threat is constantly evolving – the frequency, sophistication and volume of attacks is increasing. the failure to adequately protect against cyber - attacks can have far - reaching repercussions given the interconnected nature of the financial system. xiii page | 7 the need for resilience in the