remarks by governor gabriel makhlouf at dublin chamber of commerce 15 september 2022 speech looking through the waves : the value of resilience speech at dublin chamber of commerce delivered on 14 september 2022 thank you for the opportunity to speak to you tonight. i am going to talk about the current economic outlook, the economic policy response to the challenges facing households and businesses in ireland and across the euro area and the importance of looking at the horizon and seeing through waves. with the two successive shocks of covid - 19 and the russian invasion of ukraine, households, businesses and policymakers are faced with conditions the like of which we have not experienced in over 40 years, and markedly different from those in the decade leading up to the pandemic. add into this mix the geopolitics, the changing shape of globalisation and the more fundamental economic transitions taking place as a result of climate change, digitalisation and an ageing population, both the near and medium term economic outlook are particularly challenging. they require considered choices for both fiscal and monetary policy and probable structural reform. the outlook the change in the near - term outlook through 2022 has been significant. russia ’ s invasion of ukraine has exacerbated and prolonged the supply - side problems arising from the covid - 19 pandemic, with a particularly obvious effect on energy and food commodity prices. as a result, business input costs and consumer price inflation have remained high both domestically and in the euro area for longer than would have occurred in the absence of these adverse shocks. this global inflationary shock is eroding the purchasing power of households ’ disposable incomes as well as creating a more difficult environment for business investment. while there is some evidence that the supply - chain challenges many industries experienced during the pandemic have eased, the continued high level of both energy prices and uncertainty presents significant challenges. euro area inflation has continued to rise and has reached undesirably high levels. in august headline inflation rose to 9. 1 per cent. stripping out the more volatile components, ‘ core ’ inflation was 4 per cent suggesting that initial price pressures in energy and commodities have spilled over into many of the everyday goods and services we consume. at last week ’ s meeting of the ecb ’ s governing council, we decided to increase our policy rates by 75 basis points. our aim is to dampen the excessively high inflationary pressures that we ’ re currently seeing in the euro area and achieve our target of 2

provide a responsible service and products that are useful throughout their life - cycle. thus, through our code of conduct on mortgage arrears, and the overall consumer protection code, we focus firmly on the needs of the debtor. at the same time we all need a well - functioning economy. that in turn needs a stable and efficient financial system ; and finance cannot work if borrowers who can afford to do so do not repay debts. our policies thus reflect society ’ s need for contracts to be respected. two key questions – not unrelated – present themselves. there is the before ( ex ante ) question : how can the risk of over - indebtedness be reduced? and then there is the ex post question : how to deal with over - indebtedness? in offering a few thoughts about both questions, i am acutely aware of the fact that they are at the heart of the activities of mabs and that all of you here have more hands - on experience about them than any other group in the country. a fascinating recent account is by david graeber, debt : the first 5000 years ( new york : melville house, 2011 ), an anthropological account which includes a section on the linkages between debt and slavery in the brehon law of early medieval ireland. nigel dodd. “ cast aside the moral judgment and give debt the credit it deserves ”, financial times, november 1, 2014. bis central bankers ’ speeches preventing over - indebtedness lenders ’ responsibility in seeking to limit the emergence of new cases of over - indebtedness the central bank attaches a high expectation to the behaviour of authorised lenders. the need for responsible lending is critical, and is a feature of our consumer protection code requirements. what this means in practice is not only a creditworthiness assessment but also ( learning from experience ) the need for an ongoing relationship between borrower and lender, offering the prospect of emerging problems being addressed early. our increasing focus, as reflected in our codes, is on product design and the related governance. especially when one considers the life cycle of a long - term product such as mortgages, what is needed is that each product is designed to meet customers ’ needs, i. e., designed appropriately for its target market. the same is true for non - mortgage debt – and i am very conscious of the fact that much of mabs ’ work is with customers who are not owneroccupiers, and do not