being re - appreciated, leading to some reappraisal of the relationship model for sme lending. community - based lenders can be key actors in this dimension. 13 and innovations in such areas as crowd - funding could also come to complement other forms of non - bank finance which are sure to grow in importance as banks repair their balance sheets and respond to regulatory demands. not every financial innovation makes sense ; finance attracts many crackpot schemes and is a happy hunting ground for populism. but it is clear that there are several different proven models of organising finance that are equally good in delivering growth outcomes, 14 and which can have different impacts in other dimensions. income inequality returning to the question of income inequality, i would argue that ireland is not exceptional in this dimension either. as far as the income share of the top 1 per cent is concerned, the last quarter of the 20th century saw ireland ’ s figure growing midway between that of a group of “ anglo saxon ” countries and a group of “ continental ” countries ( alvaredo, atkinson, picketty and saez, 2013 ). indeed, in ireland, despite the substantial loss of national income in the bust, policy has gone some way towards limiting the rise in poverty in the downturn ( callan et al., 2013 ). this surely reflects a broad political consensus in ireland ; indeed some will argue that more should have been done. actually the data suggest that the later years of the boom did allow relative poverty to decline in ireland, at a time when the opposite was happening in many countries ( figure 8 ). and the corresponding data for 2010 and 2011 suggest that any reversal in this improvement has been small and mainly concentrated among young adults ( the data for 2012 are not yet available ). a similar story is shown by the gini coefficient, another indicator of inequality. of course, holding inequality or relative poverty constant at a in line with standard international practice, the recorded profits of the banks contributed to measured gdp, whereas their loan losses have been treated as a capital item, and have not been subtracted from the gdp of any year. this is why i regard strengthening of the credit union movement both financially and institutionally – a task which has been conferred on the credit union restructuring board ( rebo ) as worthy of the substantial financial resources that have been earmarked for it. for instance the choice between relying mainly on stock markets or on universal banks for the financing of firms. bis central bankers ’ speeches time of falling

patrick honohan : the return of the surprise in central banking address by mr patrick honohan, governor of the central bank of ireland, at the official monetary and financial institutions forum ( omfif ) golden series on world money, london, 8 may 2012. * * * in the old days, central banking used to be about surprises. when i studied monetary policy first, the distinctions were all between anticipated and unanticipated events, only the unanticipated mattered if policy was to improve on a supposed unemployment - inflation trade - off, so surprises were key. then along came friedman and phelps and gradually their insight that “ you can ’ t fool enough of the people enough of the time ” led to an approach to monetary policy that emphasised limited ambitions, predictability and – by and large – no surprises. i ’ ll come back to that. but some of the great pivotal moments in the history of central banking are about shock tactics, the timing, their potential impact and the communications around them. these, i submit, are the three key lessons we need to keep in mind. timing is everything when it comes to such surprises, timing can be everything – better not be late. take this from an issue of the new york times during the 1907 crisis : “ knickerbocker will be aided ; president barney quits and financiers promise to support the trust company ; jp morgan & co. help ”. but jp morgan didn ’ t help enough and the knickerbocker trust company suspended payment for 5 months. next day the trust company of america was duly saved, but it was too late : “ the fallout from permitting the crisis to surface spawned an avalanche of bank suspensions and a sharp contraction in the economy ” ( william silber, 2007, when washington shut down wall street ). notice the publication date 2007. i guess silber was not all that surprised at the september 2008 sequence of events – lehmans are let go, and, although aig is rescued almost immediately thereafter, there is an ensuing panic - and credit crunch - induced deep global recession. we may take this as the first lesson of central banking announcements : there may be no second chances : missing the moment for the decisive surprise intervention may place you in a very bad position. long - lasting effects another great epoch - changing statement was that of richard nixon some 40 years ago, on august 15, 1971, ending the bretton woods regime of fixed