doors to support the public health response to the pandemic. policymakers have acted to support vulnerable businesses and, thankfully, the pandemic has not yet been characterised by widespread company failures, owing to the unprecedented level of direct fiscal support and creditor forbearance that is in the system. given that smes account for two thirds of private sector employment, this support has been critical to avoid widespread ‘ scarring ’ in the irish economy. the viability and survival prospects of many affected firms remains highly uncertain and is likely to depend on a range of future policy choices. these choices will be difficult, and will have profound implications for our economy. looking back to 2020 looking back to 2020 in more detail, the shock to sme revenues from the pandemic was severe. the research we are publishing today, with colleagues at the esri, shows that, while the 1 / 2 bis central bankers'speeches hospitality sector has experienced the most severe crisis – which is to be expected given the nature of public health restrictions – the revenue shock has also been significant across all other sectors, with smes in manufacturing, construction, wholesale / retail, business services and a group of miscellaneous sectors all having average revenue declines of between 20 and 25 per cent. this suggests that the covid - 19 pandemic has had an effect in all pockets of the sme sector. the research also sheds some new light on how effectively smes can reduce their costs in the face of falls in revenue showing that that for every euro lost, smes have on average reduced costs by 37 cents. for the hotels and restaurants sectors, where take - up of policy supports and the need to negotiate and scale back on all items has of course been greatest, this averaged 56 cents. these figures suggest that, while companies have indeed managed to adjust to the realities of the pandemic, this adjustment for many reasons has not been enough to avoid companies experiencing losses. indeed, the majority of smes in every industrial sector in ireland were loss - making in 2020, according to the survey data that you will see presented today. a key question for policymakers and firms is to identify businesses that are viable and can operate into the future, and those which will not be able to. while policy choices have led to an avoidance of widespread insolvency up to now, it is an unfortunate reality that the effects of the pandemic on sme balance sheets, combined with structural changes that have either been created or

understanding how – in light of evolving financial vulnerabilities – funds may collectively respond to different adverse shocks. and, in turn, how such behaviour could affect the functioning of core global markets in times of stress. this can only be achieved through close collaboration, both across borders and across authorities. and it is necessary if we are to mitigate system - wide vulnerabilities effectively ex ante. which brings me to my last point, before we finish up. delivering a macroprudential perspective in the oversight of the funds sector will not happen overnight. it took over a decade to develop that framework for the banking sector. and that was from a starting point of decades of microprudential regulation. 4 / 5 bis - central bankers'speeches still, it is important that we make progress and – where we do identify systemic vulnerabilities – we have the courage to act, before shocks hit. because ultimately the costs of inaction can be large, both for investors and the broader economy. this has been, and will remain, a priority for the central bank of ireland in the years ahead, working with colleagues internationally and domestically. so let me finish off here. thank you again for joining us today. have a good evening and a safe return home to those travelling back. 1 see fsb ( 2023 )'revised policy recommendations to address structural vulnerabilities from liquidity mismatch in open - ended funds'at : https : / / www. fsb. org / wp - content / uploads / p201223 - 1. pdf. 2 see central bank of ireland ( 2022 )'the central bank's macroprudential policy framework for irish property funds ', available at : https : / / www. centralbank. ie / docs / defaultsource / financial - system / financial - stability / macroprudential - policy / nbfi / macroprudentialmeasures - for - irish - property - funds. pdf ; and central bank of ireland ( 2024 ),'the central bank's macroprudential policy framework for irish - authorised gbp - denominated ldi funds ', available at : https : / / www. centralbank. ie / docs / default - source / publications / consultation - papers / cp157 / macroprudential - framework - for - irish - authorised - gbp - ldifunds. pdf? sf