all these aspects in the running of the central bank. we also see diversity and inclusion as vital to ensuring we have the right mix of people to deliver our complex and diverse mandate and that all our people have the chance to reach their potential. conclusions let me conclude. in these remarks, i have pointed out that the development of the european and irish financial system in the coming years turns critically on major policy decisions. for the eu27, the potential gains from the deepening of banking union, capital markets union and monetary union require policy makers to move forward in taking the steps required to facilitate further cross - border integration. at the same time, the extent and nature of international trade in financial services between the eu27 and uk financial systems ( and vis - a - vis other parts of the global financial system ) will depend on the outcome of the current negotiations. under all scenarios, the central bank of ireland stands ready to fulfill our mandate to safeguard stability and protect consumers. the consistent application of a core set of principles will guide our regulatory and supervisory work, such that firms know that we will maintain our focus on ensuring that regulated entities meet our expectations and are subject to robust supervisory engagement. finally, let me congratulate the organisers of the european financial forum on putting together an excellent programme : it will be a fascinating and stimulating day for all participants. acknowledgements : i thank eoin battigan, lorna bowles, sean fitzpatrick and siobhan kirrane for their assistance in preparing this speech. 4 / 4 bis central bankers'speeches

removing this cloud. over the previous few months, we at the central bank have been making a careful assessment of the likely bank loan - losses that are in prospect over the next few years. this is over and above the valuation work being carried out by nama, and which gives us a good fix on the likely recoverable value of the larger property loans. we have been working on the non - nama loans and figuring out their likely performance as they suffer from the impact of the overall economic downturn – part of it of course attributable to the global crisis, and not just to the bursting of our own bubble. this exercise involved working with the banks, but challenging their estimates of loan - loss based on our own more realistic – some may say pessimistic – credit analysis. ( i am over - simplifying the exercise, as it also looked at other elements of the profit and loss account over the coming years ). the conclusions of this exercise are worth emphasizing. to my relief, and slight surprise, it turns out that most of the banks started the boom with such a comfortable cushion of shareholders ’ funds that they would be able to repay their debts on the basis of their own resources. this includes the two big banks. it is because of this fact – that their shareholders ’ funds will remain positive through the cycle – that one of them, bank of ireland, has already been able to tap the private market for an additional equity injection. of course they do need additional capital to move forward, but, as has happened in the us and elsewhere, the government ’ s capital injections of last year into these two institutions looks like being well - remunerated. this takes account of the low prices being paid – much lower than originally envisaged – for the loans being transferred to nama. the nama purchases replace risky property - related loans with risk - free nama bonds and are part of the process of putting them on a solid foundation. by the way, knowledgeable experts on the property market assure me that, at the low prices they have paid, that organization now has a good chance of breaking even over the coming years, as indeed has been its stated intention all along. having calculated their likely future losses, we have now required the banks to rearrange their affairs to ensure that they have ample capital reserves to ride out this period of losses. they are responding with plans that raise additional capital reserves and reduce the scale of their less central activities