. as michael reminds us in this book, the industrial structure of banking was very stable in ireland for a century or more. with the shift towards joint stock, deposit - based banking, the private banks faded away and just seven firms, which became known as the “ associated banks ” dominated the scene. each had its dublin head office in the dame street / college green area and we are standing in one of them, that of the royal bank, today. the royal was – like the hibernian – a dublin - based bank, one of those which decided it could survive despite being precluded from issuing its own banknotes by the existence of the bank of ireland ’ s monopoly. others began with headquarters in belfast ( ulster bank and northern bank ) or london ( the provincial and the national ) ; and the munster and leinster had its origins in cork. each of the banks had its own cultural and social make - up, which explains why daniel o ’ connell crops up as promoter or supporter of three of them, though he is most associated with the national bank. i was surprised a few years ago when visiting the main london office of the royal bank of scotland to find a full length portrait of daniel o ’ connell in a prominent position at the top of the grand staircase. tracing through the genealogy of the component banks of that group i realised that the portrait must have come from the old national bank which sold its uk offices to williams and glyn in the 1960s, which in turn became part of the natwest group subsequently acquired by rbs. continuity and tradition long remained the watchword. bis central bankers ’ speeches the 19th century saw a transformation in the design of banking halls, and michael gives an illuminating account of the key elements. illumination was indeed a major goal of the architects as they sought to bring light into the interiors through devices such as the clerestory – another echo of church architecture emphasised by michael. although many of the buildings are no longer used by the banks that built them, if you look closely enough in this neighbourhood, original bank names spring out at you from facades. the national irish bank on dame street carries the name “ hibernian, 1824 ” ( in this case there is no continuity, as the hibernian became part of bank of ireland, whereas nib is a descendant of northern bank ) ; “ provincial bank chambers ” clearly inscribed over a door at the westin hotel in college street reminds us where one forerunner of aib used to be. and

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