- related exposures. just last year, in 2023, the southern region grappled with extreme floods which were evident in malawi and mozambique due to the cyclone freddie, a similar event happened in north africa, in morocco, libya and surrounding areas. in 2024, the southern african region is in the middle of a worst drought in years, with elevated temperatures. the extreme weather events have a devastating impact on our region, affecting especially agricultural productivity ( which threatens food security and livelihoods ) ; infrastructure, and electricity generation for those countries that are dependent on hydro. the other matter of concern is the on - going geopolitical conflicts in the middle east including the on - going russia - ukraine war which pose threats to the stability of commodity markets. ladies and gentlemen. these events are real and have devastating impact on our economies. persistent high inflation and low growth occasioned by these events filters through the financial system, and call for effective regulations, and supervision at both micro and macro level to preserve stability. it is, therefore, gratifying that the conference has incorporated these issues on the agenda. discussions on how to resolve these issues should begin now so that we start developing concreate solutions. ladies and gentlemen, as you deliberate over the next two days, and plan for aacb conference later this year, i wish to implore you to be candid for us to develop solutions to the challenges that bestow our continent. the specific topic of interest which i note included in the agenda, is the financial stability risks related to sovereign - bank nexus. this has become evident and a subject of concern especially among emerging and developing countries. while the rise in the sovereign - bank nexus began earlier in the decade, it surged during the covid - 19 pandemic as economic activity declined and governments increased fiscal support to non - financial firms and households to cushion the impact of the crisis. to lower the potency of the sovereign - bank nexus, there have been debates on the policy considerations. this includes, among others, suggestions to maintain larger capital buffers and better prudential frameworks to strengthen banks and reduce both the probability and severity of stress. prudential policies like adjustments to risk weights and exposure limits that restrict excessive sovereign debt holdings by banks have also been noted to limit the exposure. however, all these views require consensus. chairperson, ladies, and gentlemen 2 / 4 bis - central bankers'speeches it is good to note that you have dedicated some time to these discussions,

measures to deal with what they reasonably considered to be a once in a century event. what we are seeing now – the geopolitical and financial system disruption, the challenges and threats arising from developments in technology, the fragmentation of our financial system – all the indications are that these are not once off events, may well be our new norm ( at least for the foreseeable future ), and that the pace of change may even accelerate with the advent of artificial intelligence, crypto capability and other technological innovations. in these circumstances, the previously seen monetary, fiscal and regulatory responses will not, and cannot be as accommodative going forward. it would be inappropriate, unwise and unsafe to relax regulation, or provide long - term latitude, just at the moment when risks to the system and consumers are becoming greater, or at least becoming more unpredictable. now, having sounded my customary words of caution, i want to turn my thoughts to the future of credit unions, and how i see the sector playing an enhanced, and perhaps more complete role in the provision of financial services to irish consumers and businesses. 5 / 9 bis - central bankers'speeches the future of credit unions i opened my comments this morning with a quote from heraclitus, relating to change being a constant, and rivers always changing. i am sure that heraclitus'teachings feature in the presentations of many a change management consultant. as another of his maxims, which has also survived for centuries and i am sure is often quoted, is that " big results require big ambitions. " david [ malone ] – i read your recent interview with accountancy ireland with real interest, the article that was entitled " credit unions : transforming ireland's financial landscape. " you spoke about how you saw credit unions " becoming primary financial institutions of choice, migrating from the periphery to the front and centre of the financial services landscape. " this is what heraclitus might describe as a " big ambition, " but in my mind, it is one that is eminently achievable – with a clear vision, and the right strategy. while it is undeniably true that the relatively small size of ireland's market means there will be a ceiling on the number of financial services providers that can serve our market profitably, there is always room for new or even existing providers to gain market share where their value proposition is one that satisfies the needs of existing and prospective customers. you don't need