effects of the crisis have been mitigated by exceptional counter cyclical policies. today, domestic and international, scal and monetary, macro and micro prudential policies are positively reinforcing each other including across borders. these signi cant actions of governments and of central banks – have been critical in stabilising our economies. janet yellen, united states secretary of the treasury, spoke recently about the extensive pandemic supports for workers, households and rms as a ‘ bridge to the end of the pandemic ’. 5 we now need to start thinking about what is on the other side of that bridge. the unequal impact of the pandemic on the labour market at the peak in early may 2020, over 1. 2 million people were supported by the state for their incomes, almost half the labour force, today that number is 953, 000. 6 while sobering in their own right, the aggregate covid - 19 adjusted unemployment numbers only tell a partial story, and the pandemic has affected some workers more than others. the impact by region, skill, gender, age or incomes – re ects the concentration of those groups in the sectors that have been subject to varying levels of the necessary health restrictions. [ slide 3 ] speaking in nuig, many of you will no doubt be aware of some of the regional effects associated with the challenges faced by consumer facing sectors such as tourism and accommodation. 7 understanding the effects of the pandemic on employment requires careful consideration. 8 one way is to look at the percentage of workers that were ‘ absent from work due to covid - 19 measures ’ [ slide 4 ]. 9 younger, female and less - educated groups all stand out as coming off worse in the pandemic when we look at groups that say they are away from work for covid - 19 reasons. looking across education levels ; those with primary or secondary education were almost twice as likely to be away from work than those with third level education in q2 2020. younger workers were also severely affected, with almost half the work force under 25 out of work due to covid in the rst wave of health restrictions in quarter two last year. the female - male difference is evident and interesting when we consider that in previous downturns we have tended to see the opposite pattern : considerably fewer females losing their jobs, relative to males. 10 throughout the year, as restrictions were eased, many returned to work and it was often to a

the different categories ( for example the stress - loss rate on irish commercial development property non - nama for bank of ireland was 60 % ; for irish retail mortgages it was 5. 6 % ), and to a lesser extent across the banks. these were all well above the banks ’ own published estimates and far in excess of provisions taken. the limitations of stress - testing as an exercise across the globe are pretty well appreciated. both the choice of stress scenarios in terms of macroeconomic and other external factors, and the mapping from those factors to default probabilities and to loss - given - default are always subject to uncertainty. variances are high. this is all the more so when the economy moves outside of the previously experienced range. given the steepness of the decline in economic activity ( between the peak quarter in late 2007 and the trough in late 2009, real gdp fell by 11. 5 % ; gnp by 13. 9 % ) and employment and the steady decline in house prices both actual and forecast, there was very little in historical experience – either in ireland or in other advanced economies with large financial sectors – to guide those attempting to estimate the range of plausible outcomes for a bank lending portfolio which had clearly been inadequately underwritten. loan losses were certain to be beyond almost all previous experience not just in ireland, but in advanced economies : just how far beyond was clouded in uncertainty. 3 from loss rates to capital requirements the central bank ’ s march 2010 projection for non - nama loss rates, combined with the first tranche haircut grossed up to apply to all nama loans, were employed with projections of capital and income generation from the rest of the banks ’ activities over a three - year horizon, and a small buffer, to arrive at a needed capital amount by end - 2012 that would ensure that the bank would satisfy the central bank ’ s chosen core capital adequacy thresholds. these thresholds were higher than current international standards, reflecting evolving international discussions. they were set at 8 per cent core tier 1 on basel 2 basis in a base case for roi and uk separately : retail mortgages, retail other, investment property, development property, nonproperty commercial. for “ capital markets ” lending : investment property, commercial property, non - property. projecting macroeconomic variables following such a deep decline was already a challenge, but even if they could be known, attempting to map macro forecasts into loan - losses brought any existing models ( the banks had some