on risk and uncertainty ”, address to risk australia conference, sydney, 31 august. bis central bankers ’ speeches without any security ( unsecured lending ). in plain english, this means that banks would only lend to another bank if the borrowing bank would provide something like a government security or a portfolio of mortgages as collateral to the loan. then even if collateral was provided, the length of time they were willing to provide the loan for shortened, because of a concern that the borrower would not survive long enough to repay. this placed some financial institutions in significant financial difficulty. concerns mounted as to whether some institutions would be able to fund themselves at all. as a result of this, the european central bank ( ecb ) announced that it would provide as much funds as banks in europe required through three year loans. so the european central bank has become the intermediary of last resort for the european banking system because the banks do not trust each other. more recently, as the lack of trust of some of the governments of europe has intensified, the ecb has had, in effect, indicated its willingness to act as intermediary of last resort to these governments too. one of the main reasons the ecb has decided to do this is because of the lack of trust in the longevity of the euro. investors are concerned about the possibility of redenomination risk : the possibility they are left holding an asset whose value is markedly decreased, when a country leaves the euro area and re - introduces its own currency. as a result of this mistrust, we are witnessing a balkanisation of the financial system in europe. investors in one european country don ’ t trust banks or governments in other countries. they pull back from financing across borders, preferring instead to invest their money close to home. this almost certainly is not an optimal allocation of funds to their most productive use. on top of this dangerous state of affairs in europe, and amplifying the diminution of trust in the financial sector, recent controversies in the banking sector have hardly provided any justification for the public regaining trust in the banking system. to the extent that trust was slowly being restored in some parts of the banking system over the past few years, it was shattered by the recent revelations surrounding the libor scandal, allegations of money laundering and the like. the restoration of trust so all in all, the state of the financial system in many parts of the world is not in good shape. so what is to be done

namely – people development, setting expectations and rewards, providing role models, and participative decision - making. 4 furthermore, reducing gender differences between management and staff, can enhance worker productivity. 5 more broadly, research from the imf shows a positive association between corporate return on assets and the share of women in senior positions. 6 so, the available research suggests diversity can lead to improved outcomes in terms of governance, decision - making, and productivity. these are all compelling reasons why organisations and businesses should themselves ensure greater gender diversity at senior level. but beyond just ensuring that they have such policies, are there reasons why policymakers should intervene? while acknowledging the necessity for regulated firms to take risks – every loan or investment decision has some risk attached – knowledge of risks taken by firms can improve when there is gender diversity on the board. there is an important distinction here. the available research does not suggest firms take any less risk if they have a more diverse board. it does, however, suggest that those risks are more carefully examined, and weighed, because each decision is challenged more. 7 so how can we get to a situation where there are more women both on boards and in positions of senior management? fortunately, as deputy governor of a central bank which has both financial stability and financial sector supervision as part of its mandate ( including more than 10, 000 credit institutions, insurance firms, funds and investment firms ), i am in position to influence this debate. personally, i think that diversity at senior management levels of regulated firms is a goal worth pursuing. and, at home in ireland, diversity of regulated firms is something upon which we in the central bank of ireland have started to focus in a significant way. for example, we have introduced requirements for regulated entities to have diversity policies. however, there ’ s no silver bullet. all organisations are different and have differing priorities. rather, it is something that organisations have to work at steadily, through a combination of policies and tools. however, as i mentioned earlier, in firms, we sometimes encounter the kind of problems which contributed to the financial crisis : groupthink, insufficient challenge, poorly assessed risk, and problems with culture. these traits can be associated with a lack of diversity at senior levels. therefore, in 2017, the central bank of ireland took another important step. we published data on the level of gender diversity at senior levels of regulated entities and we have committed to publishing this data on an annual basis. this included analysis of nearly 18,