increases the probability of default in non - recourse states, but not in recourse states. bis central bankers ’ speeches admittedly, this is not only down to banker behaviour. 7 to an extent, necessary policy rightly designed to prevent over - aggressive recovery tactics from lenders, as defined in earlier versions of the central bank ’ s code of conduct on mortgage arrears, will also have contributed to reducing the risk to households of employing “ wait - and - see ” tactics. the temporary removal of some repossession risk during the “ dunne judgement ” period may also have emboldened those who wait - and - see. but these barriers have been removed, and the introduction of credible personal insolvency legislation also creates a new environment less conducive to “ wait - and - see ”. in sum, resolving the mortgage arrears problem is not just a question of modifying unbearable debts. it also requires action to end the procrastination of those whose situation is not unsustainable, including moving to repossession if necessary. it ’ s not an easy job. it will take time and skill : having allowed such a large build - up of arrears cases working through them individually and determining the correct treatment will be the work of the coming year to eighteen months. ensuring that this happens effectively is the biggest challenge currently facing the central bank. as the banks secure the information needed to implement sustainable solutions without too much adverse selection, which will include getting those who can afford to pay back onto a full repayment schedule, and in some cases ( especially, but not exclusively buy - to - lets ) will have to involve repossession, the share of wait - and - sees in aggregate arrears will diminish. resolving the deep and protracted banking crisis calls on the use of advanced analytical techniques to measure and design solutions, as well as ensuring that they are implemented by the banks. though challenging, and although concrete results on the ground have been slower coming than we want to see, this work is now well advanced at the central bank and will continue to be pushed forward energetically. though three out of every four arrears cases have not yet been re - arranged by the lender. bis central bankers ’ speeches

“ beyond the aggregates : the diverse effects of covid - 19 on employment, income & savings ” deputy governor sharon donnery 30 march 2021 address by sharon donnery to the national university of ireland, galway, 30 march 2021. view slides used during the presentation good afternoon, it is a pleasure to join you ( virtually ) at the whitaker institute, national university of ireland, galway. 1 it is over a year now since covid - 19, epidemiology and zoom became staples of our conversations, our routines, our day to day. we have seen how the covid - 19 pandemic has had devastating effects on lives, livelihoods and lifestyles. in economic terms, we have seen the worst peacetime global contraction since the great depression. and while the world economy is expected to grow by 5. 6 % in 2021 according to the latest projections, 2 due to the partial nature of the rebound, over 150 economies are expected to have per - capita incomes below their 2019 levels in 2021. 3 in ireland, a striking feature of the pandemic had been that gross domestic product ( gdp ) actually grew by 3. 4 % in 2020, in stark contrast globally and to other european countries [ slide 2 ]. the gdp growth gures do point to a strong export performance in 2020 – due to multinational - dominated pharmaceuticals and computing services. 4 however, the issues of using gdp to measure economic activity in ireland are well known, and aggregate economic statistics can only provide a high - level overview of how an economy is performing. gdp growth masks a large fall off of 5. 4 % in domestic demand, re ecting the devastating impact of the pandemic on underlying domestic activity, and consumption in particular, which was down by 9 % in 2020 [ slide 2 ]. looking beyond the aggregate numbers, we saw last year how, while almost half of workers had their incomes directly supported by the state at one point, thousands of rms were shuttered for most of the year, and yet household savings increased by the largest amount ever. today, i will rstly discuss the effects the pandemic has had on employment, incomes and savings, and the importance of looking beyond the aggregate numbers to understand the full effects. secondly, i will discuss the role that employment and income support policies have played in mitigating the worst of the crisis, and the importance of understanding the differing effects of the pandemic as policymakers start shaping plans for the recovery. the worst