sharon donnery : navigating organisations through uncertainty and change remarks by ms sharon donnery, deputy governor of the central bank of ireland, at the central bank of ireland's campus, dublin, 15 february 2023. * * * a dhaoine uaisle, ta failte is cead romhaibh go leir go dti banc ceannais na heireann don ocaid seo annocht. go raibh maith agaibh as ucht an deis a thabhairt dom labhairt libh annocht, agus taim ag tnuth leis an gcuid eile den ocaid. it's a pleasure to welcome you to the central bank of ireland's campus for this event to discuss the important theme of " navigating organisations through uncertainty and change ". the theme of navigation seems apt for the environment which many organisations currently face. it was a theme i chose for my first major speech in my current role. in those remarks i outlined the bank's perspective on the need for the leaders of financial firms to chart a course through the prevailing uncertainty and complexity in the global economy. at the core of that leadership challenge is being able to balance the many competing demands business leaders face – to remain competitive and profitable, to meet the needs of customers, to comply with regulatory requirements, to maintain high standards of corporate governance, to keep up with digital trends, and to transform in order to be fit for the future. there are also leadership challenges for public leaders, including central bankers and regulators, and i will mention some of those also. in my comments today i will speak briefly about the context for the central bank's strategy and the leadership challenges we face, i will also address the themes and approaches in the strategy and how it sets us up to continue to deliver on our important mandate into the future. i will reflect on some current aspects of uncertainty and before i hand over i might share some brief personal thoughts on leadership in public organisations at times of volatility and change. the mission of the central bank of ireland is to serve the public interest by maintaining monetary and financial stability while ensuring that the financial system operates in the best interests of consumers and the wider economy. when putting together its current strategic plan, it did so in the context of : a statutory mandate which had expanded significantly in recent years ; increased organisational complexity ; a rapidly changing and growing financial sector ; changing consumer preferences

of the domestic financial system throughout this shock. more broadly, while market attention has focussed on banks in recent months, potential vulnerabilities in the non - bank sector have not gone away. liquidity mismatches, leverage and interconnectedness are key potential sources of vulnerability in non - bank financial intermediaries. the 2022 uk gilt market episode was a prominent example of the speed with which risks can crystallise in this sector. further progress is needed at a global level to strengthen resilience of non - bank financial intermediation. 1 / 3 bis - central bankers'speeches monetary policy is transmitting to the global real economy. in practice, this means higher borrowing costs for governments, households and businesses, tighter credit conditions for those looking to borrow, increasing rates on bank deposits, and ultimately some slowdown in economic activity so as to bring inflation back to target. domestically, despite the range of global risks i set out earlier, the irish economy has continued to surprise with its resilience. our domestic growth forecasts have improved relative to late last year, although of course we must remain mindful of the range of adverse outcomes that may materialise, as inflation continues to erode real incomes and businesses continue to face challenges related to high costs. rising interest rates have already had immediate effects in the commercial real estate market, and appear to be slowing the housing market in recent months. households and businesses are front and centre in our financial stability assessment. undoubtedly, many are experiencing challenges with the increase in the cost of living. however, at the system - wide level, lower levels of indebtedness, continued household income growth and robust employment remain a key source of strength. they are supporting mortgage repayment capacity, and are of course a key determinant of the revenues of local businesses. our assessment is that, if the economy continues to evolve in line with our expectations, we are likely to see only modest increases in financial stress among domestic borrowers, despite clear challenges for some groups of borrowers. turning to the domestic banks, higher levels of bank profitability are likely to continue under our central assumptions. of course there are tail risks that we must continue to factor in and be ready to address. however, the banking system has ample headroom above regulatory requirements in both capital and liquidity, with very high levels of cash reserves. all of these support the resilience of the sector. under this central outlook, we are therefore continuing - as