economic fragmentation. other downside risks we discussed at the meetings were a severe tightening of global financial conditions, sharper monetary policy impact amid high debt, stickier inflation, systematic sovereign debt distress in emerging markets and developing countries, china's growth and the fragmentation that is hampering multilateral cooperation. the increased uncertainty faced by the global economy is reflected in the ongoing high uncertainty around the outlook for the euro area. the governing council of the ecb will be especially focused on incoming data as part of making our monetary policy decisionmaking in the coming weeks. our recent decisions represent a significant tightening of the monetary policy stance, commensurate to the significant challenges to price stability we have been facing. and on the evidence so far, it is too early to start planning for a pause in our tightening of policy. indeed, and again based on the evidence we have to - date, rates will need to continue at restrictive levels to help re - set the balance between supply and demand in the economy and bring down inflation. supervisory milestones ahead in 2023 deputy governor's sharon donnery and derville rowland have recently spoken about our supervisory milestones for 2023. this year our principal focus will be on : the assessment and management of risks to financial and operational resilience ; continuing to drive for fair outcomes for consumer and investors ; overseeing the withdrawal of ulster bank and kbc from the irish market ; and detecting and sanctioning market abuse. transforming our approach to regulation and supervision a key priority in our strategy is to transform how we regulate and supervise the financial services sector. our objective is more efficient and effective regulation and supervision, better enabled by data and technology, and supported by new skills and enhanced capabilities. 2 / 3 bis - central bankers'speeches we will retain our risk - based approach to supervision but operate in a more integrated manner across our expanding mandates. we are currently in the early design phase of this, but it is something we would like to discuss with you in the future. we are aiming to put innovation at the centre of our approach to regulation and supervision, both in how we enhance our own operational capabilities and also in how we harness the benefits and mitigate the risks arising from innovation within firms and the financial sector as a whole. on the enhancement of our innovation hub, i understand there was a good discussion, with useful insights, at the innovation sub - group about actions that we can consider as part of this work. we will engage with you and the wider

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