are safe, loans are available, insurance policies will be honoured and so on. while some financial services activity may be considered ‘ socially useless ’ 3, our economies are dependent on the effective functioning of the financial system, allowing : the exchange of value for labour, goods and services, commodities, and so on through reliable and trustworthy payments mechanisms ; savers and investors to confidently move money from the present to the future ; borrowers and entrepreneurs to access funding and capital ; the spreading and pooling of risk ( e. g. through insurance ) ; and cross border trade. because of this importance, financial services firms are subject to regulation and supervision. the central bank ’ s mission is to serve the public good by safeguarding monetary and financial stability and by working to ensure that the financial system operates in the best interests of consumers and the wider economy. the central bank ’ s aspiration is for a functioning financial services system that sustainably serves the needs of the economy and its consumers. this requires functioning and trustworthy financial markets and firms. further, the overall functioning of the system is linked to the : decisions, behaviours and operations of financial services firms ; effectiveness of regulation and supervision of markets and firms ; interaction between relevant arms of the state ; financial literacy of users and the decisions they make ; and safety nets that are in place to deal with failures – be they firm or market failures, or where financial services consumers experience difficulties. in ireland, we have much that is operating well. in fact, much more works well than does not – certainly by the measures i have just outlined. but, we sure do notice where and when things do not work as well as they should. globally and in ireland these range from the catastrophic failures that led to the global financial crisis and the collapse of the irish banking system, to the conduct scandals that have beset so many countries. and we can also see issues in the functioning of key financial services sectors. i have spoken previously about the functioning of the mortgage market4 and the insurance markets5 so will not go into specific details here, but recognise that they are not operating optimally for a variety of reasons. clearly there is also more work to be done, including in the behaviour, culture and accountability of management and boards in financial services firms6. the central bank is committed to continuing to drive improvements in the functioning of the system, such that it is appropriately resilient, and that it is serving the needs of its consumers and the wider economy.

bankers'speeches 8 see, amongst others, ammer et al ( 2016 ), carney ( 2016 ) and dieppe et al ( 2017 ). 9 for instance, see carvalho and fidora ( 2015 ). 10 caballero et al. ( 2015 ). 11 see eichengreen ( 1993 ) on the political economy problems associated with material shifts in intra - eu bilateral exchange rates. 12 the category of internal spillovers also includes intra - area contagion effects of financial crises in individual member countries. the analysis of crises is beyond the scope of this speech. 13 macroprudential policies also have a role to play in addressing the common component in the euro area financial cycle, in view of the costs associated with deploying monetary policy to manage financial stability risks. 14 martin and philippon ( 2017 ). 15 see draghi ( 2016 ). 10 / 10 bis central bankers'speeches