ed sibley : report on local public banking and work of central bank of ireland introductory statement by mr ed sibley, deputy governor ( prudential regulation ) of the central bank of ireland, at the joint committee on finance, public expenditure and reform, and taoiseach ( head of parliament ), dublin, 23 october 2018. * * * good afternoon chairman, committee members. thank you for the invitation to appear today to discuss the recent report on local public banking in ireland1 ( the report ) and related matters. i am joined today by patrick casey, the registrar of credit unions, and anna marie finnegan, head of policy, registry of credit unions. in my brief remarks today, i will address three topics that intersect between the scope of the report and the work of the central bank of ireland ( central bank ). firstly, i will provide an overview of the process for bank authorisation ; secondly, i will outline developments in the provision of credit to the sme sector in ireland ; and thirdly, i will discuss the regulation and supervision of the credit union sector. 1. authorisation since the commencement of the single supervisory mechanism ( ssm ) in late 2014, the european central bank ( ecb ) has been the competent authority for the authorisation of banks in ireland and across the eurozone. this means that applications for bank authorisation are dealt with in a consistent manner across the entire eurozone. in practical terms, the local national competent authority ( i. e. the central bank of ireland for ireland ) assesses applications in consultation with the ecb, prior to a recommendation being made through the ssm ’ s governance processes on whether to approve the application or not. to this end, the central bank has dedicated authorisation teams following processes that are transparent, predictable and consistent. the assessment of an application will consider, inter alia : the financial resources the firm has available ( including under a plausible stress ) ; the sustainability of its business model ; governance and risk management arrangements ; and its ability to recover if it gets into difficulty. applicants that can meet the requisite standards in these areas will be approved. 2. provision of credit to the sme sector in ireland the central bank understands the importance of smes to the irish economy. smes account for the vast majority of active enterprises by number and employ about two thirds of the irish workforce. 2 in ireland, the majority of sme investment is financed through internal funds. 3 for external financing, bank lending

2008, while the european central bank announced it would keep its main rates at current or lower levels at least through mid - 2020. this should sustain favourable financial conditions for longer than expected, as well as capital inflows to emerging markets. as monetary easing by leading central banks appeared more certain and positive macroeconomic developments at home continued, the national bank of serbia decided to lower the key policy rate in two instances, july and august, by 25 bp each, to 2. 5 %, i. e. its lowest level in the inflation targeting regime yet. thus, in conditions of subdued inflationary pressures, the national bank of serbia continued to provide additional support to economic growth and a sustainable rise in employment. as so far, monetary policy decisions will continue to be made in consideration of the effects of past monetary easing on the future inflation profile, as well as of the effects of other domestic and external factors. given that the key risks to the projection are still mostly associated with the international environment, the national bank of serbia will keep a close eye on developments in the international commodity and financial markets and assess their impact on economic movements in serbia. as before, monetary policy will be predictable and consistent in delivering low and stable inflation in the medium term. this will at the same time help maintain macroeconomic and financial stability and contribute to sustainable economic growth. owing to this, there is a constant rise in the number of domestic and foreign investors who are investing at a longer horizon, having recognised the stability and prospects of our economy. current economic trends and the results achieved thus far are a good basis for further sustainable and dynamic economic growth. this is confirmed by our latest projections and key macroeconomic developments, which will now be presented to you in detail by our colleagues from the economic research and statistics department.