such as the government can play in stimulating buy - in among all creditors, for example by stating clearly ex - ante their risk tolerance and the way in which they will engage with the process. while the introduction of scarp is certainly a positive, it is always prudent to consider potential risks and plan accordingly. scarp is untested, with the first cases only now beginning. we have yet to observe how constructive or otherwise creditors ’ engagement will be with the process. further, we can only speculate as to how the insolvency system will be able to respond in the event of a large wave of insolvency cases in the short run. due to the nature of the pandemic, 2 / 3 bis central bankers'speeches insolvencies have been all but paused in the last two years. one would therefore expect a jump in caseload purely to allow for catch - up due to the lack of a “ normal ” level of insolvencies in 2020 and 2021. however, added to that, there are over 8, 000 irish sme loans with forborne term loans at the irish banks, and 25, 000 businesses that were reliant on wage subsidies early this year. for context, the annual rate of insolvent liquidations seen at any point between 2014 and 2019 is a small fraction of these numbers. 6 on top of those liquidated, many thousands more are likely to require restructuring, either through scarp or through bilateral negotiations with creditors. my main call to policymakers and to creditors of all types today is to be patient, and to ensure that unnecessary liquidations of viable smes are avoided over the coming months. one must caveat all of the above with the acknowledgment of the elevated uncertainty in which we are now operating owing to the invasion of ukraine. the downstream economic effects here will potentially lead to a need to update our assessment both on the potential size of the insolvency problem, as well as on the policy issues outlined above. this is a matter to which we will continue to pay great attention. i will now hand over to my colleague christian kettel thomsen. i hope that you enjoy the conference. 1 see the february 10th blog post by the chief economist of the ecb, philip lane, for a comprehensive overview of the bottlenecks within the global economy and their relevance for monetary policy makers. 2 this research was carried out by kren et al.

insurance undertakings to conduct their own risk and solvency assessment. such a requirement will be familiar to irish insurers, through the central bank of ireland insistence that boards define their risk appetite and formulate an explicit statement around it. sylvia will soon tell you more about our expectations as regards flaor and orsa, 1 a welcome development brought about by solvency ii. finally solvency ii brings a common approach across europe to regulatory returns of insurers. some countries, such as france, had long developed a strong framework of regulatory returns under solvency i. french general insurance companies have for decades submitted to the supervisor detailed templates of claims and reserves development by underwriting year and by accident year, while life companies have submitted to the french supervisor the granular decomposition of their insurance liabilities for a very long time as well. supervisors there are used to pouring over line by line asset templates to measure the rise and fall of intragroup group financing or repos, and to plot the unrealised capital gains or losses by asset classes. solvency ii ’ s greatest gift to insurance supervision in ireland is the provision of detailed, standardised reporting templates. the central bank of ireland calls on insurers to devote the resources necessary to fill them accurately, as these templates are set forward looking assessment of own risks ( flaor ) and own risk and solvency assessment ( orsa ), respectively. bis central bankers ’ speeches to become a central tool in our effort to better understand irish insurance firms and challenge constructively their management. governance, risk assessment and reporting appear to me the three manifest improvements brought about by solvency ii to the european regulation of insurance. solvency ii also brings greater freedom for insurance undertakings to invest policyholders ’ money in a variety of asset classes. the debate over capital charges for infrastructure assets and securitisation has been so fraught that it may have obscured the much greater principle of free investing, that supersedes the forced diversification rules of solvency i. i will turn to capital requirements in a moment, but the greater issue for supervisors should remain the ability of insurers to define knowledgeably their investment risk appetite, to set their own diversification rules, and to invest in asset classes they understand fully. solvency ii brings to insurance firms the potential to invest where they couldn ’ t before. the future will tell us whether the capital allocation of these institutional investors will have led to greater sustainable growth in europe,