a recurring phenomena in market economies and i suggest there is an important role for ‘ long memories ’ in financial regulation. we need to guard against the swinging pendulum where regulation has tended to 1 / 4 bis central bankers'speeches weaken during a boom and is then strengthened following the inevitable bust. 4 the benefits of financial regulation tend not to be noticed, but the cost of things going wrong is felt by everyone, and rarely forgotten. the green transition awareness of these costs and benefits is important in times of economic transition, not least the most talked - about right now, the transition to a carbon - neutral economy and the need to correct a major market failure. i agree with us treasury secretary yellen that “ our most financiallystable future is our most environmentally sustainable future. ” 5 the future will see new regulations putting requirements on institutions to embed esg risks into their strategies and risk management frameworks. but collective action by all of us – governments, policymakers, firms, investors, consumers, and regulators – will be needed to overcome this major market failure. and in the next few months, our new climate risk and sustainable finance forum will bring together key industry and other stakeholders to share knowledge and understanding of the implications of climate change for the irish financial system. the digital transition turning to the digital transition, technology is not only re - shaping the way we engage, interact and do business, but it is also having a structural impact on our economies and the financial system. the benefits of operational resilience and investment in technology were evident throughout the pandemic. but a competitive digital economy is central to europe ’ s approach to shaping its future. payment and e - money firms, for example, are expanding into the financial services ecosystem. and ireland is the european home to some of the global bigtech firms. we established an ‘ innovation hub ’ a few years back to allow fintech firms – as they moved from the world of technology into a regulated financial environment – to engage with the central bank outside of existing formal regulator and firm engagement processes. we are going to review the hub this year to ensure we are engaging effectively in light of the rapidly - changing landscape. in the interests of time, i will not talk about central bank digital currencies. and in the interests of managing my inbox, i will not talk about crypto, other than refer you to the blog on digital money that i wrote last year. 6 the changing financial system implicit in what i have said already is the

##inancing phenomenon has very likely been a supportive factor for the general economy. the precise effect is difficult to identify because it is hard to know how much of the spending financed by home equity extraction might have taken place anyway. nonetheless, we know that increases in home values and the borrowing against home equity likely helped cushion the effects of a declining stock market during 2001 and 2002. rising credit card debts for homeowners and renters the rise in homeowners ’ debt service burdens over the 1990s, albeit small, is associated with increases in their nonmortgage debt and, in particular, with rising levels of credit card debt. the financial obligation associated with credit card debt is difficult to measure. on the one hand, households are obligated to pay only a minimum amount and thus, in times of financial stress, a household can forgo making more than this minimum payment. on the other hand, we know that many households make more than the minimum payment and indeed likely would be quite uncomfortable paying only the minimum amount. during financial difficulties, these households might even consume less to pay more than the minimum. defining the point at which households feel they should pay down their credit card debt is difficult, and thus our measure of debt service relies on estimates of minimum payments required by credit card lenders. there are several reasons that homeowners might carry more credit card debt than they did a decade ago, but these reasons generally do not indicate financial weakness among homeowning households. indeed, as noted, delinquency rates on credit card payments have been falling during the past year, despite households ’ relatively larger holding of credit card debt. one possible reason for the secular increase in credit card debt is rising u. s. homeownership rates. according to the bureau of the census, the share of u. s. households that own homes rose from about 64 percent in 1990 to almost 68 percent in 2003 even as the population grew substantially. because of rising incomes, lower interest rates, and increased rates of household formation, more people have chosen to buy homes rather than to rent, increasing the value of mortgages outstanding. although it does not show the relationship conclusively, the federal reserve ’ s survey of consumer finances suggests that these newer homeowners who make smaller down payments tend to bring with them higher levels of nonmortgage debt and, in particular, credit card debt. the ability of lending institutions to manage the risks associated with mortgages that have