difficulties that were already causing inflationary pressures in recent months, in particular relating to energy supply and prices, and availability of other goods including inputs to food production. i will focus the remainder of my remarks on a number of domestic policy issues relating to those businesses continuing to face financial distress due to loss - making and the accumulation of liabilities over the last two years. at the central bank, we are very focused on these issues, both because we have a direct supervisory mandate over retail banks and other lenders, a key creditor of many of these smes and larger enterprises, but also through our mandate to provide independent economic analysis and advice. through this latter lens, we think a key policy issue at this juncture is how best to channel distressed but viable businesses towards restructuring opportunities and unviable businesses towards liquidation. we see it as important to avoid the unnecessary scarring that might result from the liquidation of viable businesses with a sustainable trading future. highlighting the difficult balancing act ahead of us, i must also note that the economy would be harmed by a longer - thannecessary extension of forbearance to businesses who simply do not have a viable trading future. the expertise, labour and capital tied up in those businesses would better serve the 1 / 3 bis central bankers'speeches economy deployed to other endeavours. the challenge at this point can be summed up as providing effective triage between the viable and unviable. the legal architecture around the financial distress of businesses is not typically at the top of most economists ’ list of priority topics. however, at this moment, it is indeed critical. recent imf work tells us that a blend of in - court, hybrid and less formal procedures, which facilitate both reorganisation and liquidation, are all key ingredients in a strong insolvency system. according to that work, ireland is among a group of countries with a very strong framework, if not quite best in class internationally. this contrasts with well - known issues in the mortgage market, where difficulties in lenders ’ recourse to collateral continue to have legacy effects a decade on from the previous crisis. in ireland, as in many jurisdictions, many smes have multiple creditors. in ordinary times, one might expect an sme ’ s liabilities to include trade creditors, bank debt in some cases, and perhaps a delayed payment to the tax authority, a supplier or a utility provider. however, the pandemic has magnified this beyond all recognition, with 105,

gabriel makhlouf : business finance & investment - recovering from the pandemic, preparing for future challenges opening remarks by mr gabriel makhlouf, governor of the central bank of ireland, at the joint central bank of ireland, european investment bank, esri conference, “ business finance & investment - recovering from the pandemic, preparing for future challenges ”, virtual, 21 march 2022. * * * good morning, it is a pleasure to welcome you all to this webinar. this is the second year running that we have hosted an event with the esri and the european investment bank. i would like to thank both institutions for their collaboration and openness, as we aim to benefit from each other ’ s expertise on this important topic, as well as to inform public debate. before the pandemic, we had previously hosted the launch of the eib ’ s investment survey for ireland physically in our premises in north wall quay, and we certainly hope to be able to get together to do something similar again in future. i extend a warm welcome to all of today ’ s speakers and panel members, and in particular to our keynote speaker, the minister for finance, paschal donohoe. good policy cannot be set without data, research and analysis. however, this analytical toolkit must then be complemented by the real - world experience of practitioners, who can assist in translating the insights that come from research into practical policy solutions. events like this are an attempt by our institutions to provide this holistic view which is essential to good policymaking. when i opened this conference almost one year ago, the backdrop was one in which the country had spent the first months of 2021 in lockdown, and in which heightened uncertainty prevailed regarding the effects of the pandemic on many sectors of the economy. in the intervening period, despite the emergence of the omicron variant, the economy has proved remarkably resilient, and rather than further pandemic - related output losses being our primary concern, focus has been shifting in recent months to the issue of inflation as a potential economic headwind. even before the invasion of ukraine, inflationary pressures were being stoked by a range of bottlenecks within the global economy, leading to supply - demand imbalances in many sectors. 1 from the point of view of the irish economy, the tragedy unfolding in ukraine can be thought of as an exacerbating factor which will make more acute many of the