considerations – beyond supervision or regulationdrive location policy. the potential establishment of new business lines in ireland also presents a broad range of risks. for the central bank from a financial stability perspective, a key consideration is understanding the capacity of any potential firm to cause harm to the financial system, the economy and to citizens through its course of business – particularly were it to fail. higher degrees of complexity and interconnectedness of new firms underline the importance of taking an international perspective in our assessments of potential systemic risks. for new firms, it is particularly important we fully understand their interaction with broader firm structures, should a firm intend to establish a subsidiary here. in a functioning market firms must be allowed to fail, subject to the deployment of recovery and resolution tools. and there is a resolution dimension to authorisation. in this context we assess issues such as retail deposit base, intra - financial system assets, type and concentration of lending, and assets under management. more broadly, legislation such as the bank recovery and resolution directive ( brrd ) provides a harmonised framework for recovery and resolution across the european union. the responsibility for resolution planning sits with the central bank in our role as national resolution authority. under the brrd banks are, amongst other things, required to prepare recovery and resolution plans to mitigate the impact of their potential failure on the economy. smaller banks and in - scope investment firms are also required to prepare for their failure but these firms would normally be liquidated under insolvency procedures. in the banking union, the single resolution mechanism has responsibility for the resolution of significant institutions. the resolution planning process begins with a strategic business analysis. through this we 3 / 6 bis central bankers'speeches analyse banks or investment firms structure, financial position, business model, critical functions, core business lines, internal and external interdependencies and critical systems and infrastructures. this is followed by the identification of a preferred resolution strategy which includes : ( i ) an assessment of both the credibility and feasibility of resolving large institutions ; ( ii ) an assessment of the individual institution ’ s loss absorption capacity ; or ( iii ) whether smaller firms should be liquidated under normal insolvency proceedings. through this process we establish whether a firm ’ s failure would have a material adverse impact on : the functioning of the financial market and market confidence financial market infrastructures other financial institutions the real economy. the broader non - bank sector is also not immune to externalities and systemic risks which must be closely monitored.

sharon donnery : some perspectives on brexit remarks by ms sharon donnery, deputy governor of the central bank of ireland, at the irish centre for european law, royal irish academy, dublin, 22 february 2017. * * * i would like to thank sean o ’ sullivan, james o ’ sullivan, and micheal o ’ keeffe for their contributions to my remarks. good morning, it is a pleasure to be invited to share some perspectives on the impact of brexit. disentangling the potential macroeconomic, financial stability, regulatory, and legal effects of brexit is no easy task. however, this is of particular importance for all of us here today, given the significant level of exposure ireland has to the uk. there is no road map as to how a country goes about exiting the union. the unprecedented nature of the event makes assessing the effects difficult and navigating a clear path challenging. due to the restriction on any negotiations taking place before article 50 is invoked, we know little for sure and even less in detail. therefore, to guide us in our risk assessment, policy development and strategy, we must look at all possible options that are left open to the many, and varying stakeholders. the precise impact on ireland ’ s economy will be determined by a wide range of factors. these include : the conditions of the uk ’ s exit and type of trade deal which will emerge from the negotiations the resulting impact on the uk, and the extent to which this is transmitted to ireland and irish firms including financial institutions the many possible regulatory outcomes. however, given ireland ’ s high level of exposure to the uk economy, we expect the overall effect to be negative and material. for the financial services sector, brexit will also likely have implications for issues such as passporting, equivalence and hence implications for firms ’ future plans for location or expansion. i am sure you will appreciate that these are both market - sensitive and politically - sensitive matters, and will go right to the heart of the forthcoming negotiations. in my remarks today, i will first frame the discussion in its macroeconomic context. i will then touch on possible financial stability considerations from potential changes to the irish financial services sector. finally, i will briefly discuss some of the challenges for cross - border regulation going forward. economic and financial market developments despite the volatility in global financial markets in 2016, the most reliable measures of domestic spending and economic activity suggest that the irish economy continues to grow at a