mario draghi : exchange of views with members of the irish parliament introductory statement by mr mario draghi, president of the european central bank, during his exchange of views with the house of representatives, dublin, 8 november 2018. * * * thank you, chairman. i am happy to be back in dublin and honoured to be invited to speak at the oireachtas. on this occasion, i am joined by my colleague, philip lane, whom you meet regularly in his capacity as governor of the central bank of ireland. while the ecb is accountable to the european parliament, we greatly value our exchanges with national parliaments. in september, some of you already met the chair of the supervisory board, daniele nouy, in frankfurt and discussed the ecb ’ s supervisory policies. in full respect of the functional separation between the ecb ’ s monetary policy and its supervisory tasks, today is an opportunity to discuss our monetary policy and policies to make the euro area economy and its constituent parts more resilient. in this respect, i expect an open exchange from this meeting, which will give us a chance to listen to and better appreciate each other ’ s positions. i am conscious that i am speaking in a country that went through a severe crisis. the irish people made tremendous efforts, for which i have great respect. and these efforts are now paying off. the euro area economic outlook ten years after the start of the global financial crisis, the euro area economy is performing well – and has been for some time. we have now seen 22 consecutive quarters of economic growth, while over 9 million jobs have been created and the unemployment rate has declined to 8. 1 %, its lowest level since november 2008. the irish economy has seen a particularly strong expansion in recent years. ireland is now growing at the fastest pace of any euro area country. unemployment has been falling too, and now stands well below the euro area average. this is all the more impressive given the severe crisis ireland went through and the legacies it is dealing with, including high private debt and arrears. looking ahead, while some sector - specific data and selected survey results have been somewhat weaker than expected, the latest incoming information overall suggests that the broad - based expansion in the euro area, and in ireland, is set to continue. against this background, euro area inflation is expected to continue to converge towards the ecb ’ s objective of below, but close to, 2 % over the medium term. getting to this

of overstretched asset valuations at the euro area level, we are seeing some localised risks. however, euro area monetary policy is not the appropriate tool with which to address such risks. they call instead for targeted macroprudential policies, which can be tailored to local and sectoral conditions. the recent decisions by the central bank of ireland are an example of how macroprudential policy can promote financial stability. as regards brexit, with negotiations ongoing and less than five months to go until the united kingdom ’ s departure from the european union, it is essential to prepare for all possible outcomes, including a no - deal scenario. while the direct trade effects of a hard brexit would be limited for the euro area as a whole, ireland is more exposed due to its very close trade relations with the united kingdom. we also see limited overall risks to euro area financial stability. without sufficient mitigating action, however, a cliff - edge brexit could have an adverse impact in certain areas of centrally cleared derivatives markets. sources of risk from outside the eu have grown since may. a stronger us dollar and heightened trade tensions triggered renewed stress in a number of emerging market economies. financial integration and the deepening of emu thanks to our collective efforts at the european and national level, we have come a long way since the start of the financial crisis. however, to strengthen our economies and preserve financial stability, we need to go further. let me highlight in particular some of the concrete steps in the area of financial integration that we need to take at the european level. first, we need to complete the architecture of the banking union. the benefits of having a euro area supervisor are clear when we look at banks ’ strengthened balance sheets. still, more needs to be done to reduce the risks for citizens as both taxpayers and depositors and to break the remaining link between banks and national governments. in addition to the adoption of banking package which is currently under negotiation among eu legislators, a genuine banking union needs further regulatory harmonisation, for instance through greater reliance on regulations 2 / 3 bis central bankers'speeches instead of directives. in particular, unwarranted national options and discretions still stand in the way of a level playing field for banks. at the same time, we need to establish a common backstop to the single resolution fund and lay the groundwork for the creation of an effective european deposit insurance scheme. significant steps in these areas are a precondition for