. therefore, to fully implement a new strategy or to rebuild an organisation to be effective in a changing environment, it is critical to reshape culture as well. 3 / 6 bis central bankers'speeches the primary responsibility for reshaping culture rests with the executive team, under the direction of the board. it is not a human resources or organisational design exercise. it is a leadership responsibility. it requires leaders to take a long hard look at the current culture, the existing business processes, the work attitudes and behaviours they foster. without first establishing what the current culture is, the issuance of lofty mission statements or long lists of core values are merely paying ‘ lip service ’ to implementing effective cultural change. since employees tend to take their cues on what is important and how to behave from their leaders, negative activities and behaviour at the top foster negative behaviours further down the organisation. “ a good organisational culture is about more than avoiding good people doing bad things ; it is about equipping and enabling good people to do ever better things17. ” a firm in seeking to effect cultural change can take some practical steps to achieve this aim. i will suggest five as a starting point : 1. communicate and " walk the talk " - the cultural values and expectations of the firm need to be consistently communicated and modelled by the top, middle and lower management levels. 2. enhance diversity at senior levels – meaningfully addressing the acute lack of diversity at senior levels requires : more ambition, including in targets and measures ; more than lip service being paid to diversity programmes ; better building of pipelines of talent ; considering the overall construct and functioning of the executive management layer when making appointments ; and identifying and reducing barriers to change. 3. practice, process, performance – principles and values need to be reinforced through practices and processes, including training and particularly performance management. there must be clear alignment between individual roles and objectives and wider purpose, strategy and outcomes, with people held accountable for their actions. 4. ongoing assessment and checking – boards and executives need to have mechanisms and measures to understand whether the culture they espouse is consistent with the culture of the organisation, and consider how they would identify where it is not. considering how decision - making, risk identification, product development, the use of behavioural economics, the treatment of whistleblowers and everything in between works in an organisation is key to understanding the culture of the organisation. boards and executives need to consider the information they receive and

dependence on sources of tax revenue such as stamp duties, capital gains tax and corporation profits tax made total tax revenues dependent to an exceptional degree on profitable economic conditions, high transactions in the property market and asset price appreciation ( chart 2 ). all tax systems tend to do better in such conditions, but the elasticity of tax revenue response to a return to more normal conditions was exceptionally high in ireland. of course tax revenues have slumped, and expenditure has soared in all of the countries affected by the global downturn of 2008 – 9 and the slow recovery that is now in process. ( the taxes and spending programmes that behave in this way are normally seen as stabilizing, and indeed are called the automatic stabilizers. ) but the deterioration in ireland ’ s fiscal position has been worse than almost any other country. partly of course this reflects the fact that ireland ’ s home - grown property bubble had risen further and so has fallen further than most ( chart 3 ). but it also reflects the heightened elasticity of the tax receipts. interestingly, when you plot tax and current expenditure as a percentage of gdp, you might miss this ( chart 4 ), masked as it is by the scale of the collapse in gdp – tax receipts fell even faster despite big increases in rates and base especially in income tax as the government tried to make up for the shortfalls elsewhere. that is one of the main reasons why ireland ’ s exposed fiscal position, with which the government has been struggling for the past two and a half years and which will be the subject of intensified corrective action to be set out in detail in the promised 4 year fiscal programme to be announced shortly, is so exceptional. chart 2 chart 3 chart 4 how could one use accounting numbers to improve the usefulness of the sgp for ensuring sustainable public finances? i have some ideas on this to which i will return after i speak a little about accounting and the irish banks. a full account of the government finances is not complete in ireland without considering the banks. over the past year or more there has been intense interest in figuring out what will be the total cost of the losses incurred in the property bubble. indeed this has been a focus of attention worldwide, with for example the imf ’ s world economic outlook report devoting attention to the issue in each of its five semi - annual reports between april 2008 and april 2010. interestingly, the estimated losses for the global financial system from this source have oscillated, growing from the first