emerging problems. 1. international aspects of the fiscal crisis and recovery of the 1980s in trade, migration and finance, ireland had of course been an exceptionally open economy for a very long time. the large migration flows, especially to the uk and the new world, and the currency and banking links go back to the early 19th century at least, with scarcely any overall interruption. irish banks parked their excess resources in the london money market right up to the 1960s – a pattern familiar to many african countries today. nor is the current crisis the first ( o grada, 2011 ) – indeed the potentially turbocharged nature of the globalized economy is well - illustrated by the rapid recovery from the previous severe crisis of less than a generation ago, whose onset coincided with the decoupling – for the first time since just after the napoleonic wars – of ireland ’ s currency from sterling. the earlier of the two macroeconomic cycles we look at happened at a point where global capital markets were still just beginning to move into the high gear that we see today. we may think of this as turbocharger mark 1. it allowed the irish government to access foreign capital to some extent without much by way of credit risk premium, but the fear of a sudden stop of this capital flow brought expansion to an end and resulted in a painful and protracted recession through the 1980s. that crisis had its origin in the turbulent macroeconomic years of the 1970s which themselves saw ireland make several severe demand management errors which stifled its capacity to benefit fully from the opportunities offered by eu ( ec ) membership from 1973. new opportunities there were, and especially the higher prices for agricultural produce under the common agricultural policy. but that was not all : eu membership became a major channel for transmitting globalization to ireland. but the expansionist fiscal response to the stagnation of the 1970s created a huge and spiralling government and balance of payment deficit which proved difficult to reverse in the early 1980s. by this stage, membership of the erm of the european monetary system had broken the currency link with sterling, and the irish pound was prone to being realigned against the stronger erm currencies – something that happened about once a year for the first 8 years of the system. it is interesting therefore to contemplate how international factors influenced the fiscal correction of the 1980s. although exchange controls still existed and indeed had been as with many african countries, the tendency for comparative advantage in trade to lead to heavy concentration in exports on just a few commodities is a

won ’ t. we are all too aware that low impact entities such as, for example, retail intermediaries, can also cause consumer detriment through overcharging, mis - selling and poor systems and controls. there will be a different approach to low impact firms but they will not fly beneath our radar and will not have an easier time. we plan to monitor the financial aspects of these firms through semi - automatic reviews of their on - line returns as our technology infrastructure evolves. our on - line returns programme, when combined with prism key risk indicators drawn from those returns and prism reporting functionality, is helping us advance rapidly down the automation route. we will box smarter through greater use of technology and make sure that the supervisory teams overseeing low impact firms are resourced to do focused thematic work, carefully targeted at higher risk areas, taking action when problems are identified. while we won ’ t be doing regular face - to - face meetings with every low impact firm, that doesn ’ t mean we won ’ t be watching them and that we can ’ t follow up when we discover wrongdoing. we may, on occasion, conduct spot - check inspections of low impact firms. we use themed inspections of regulated financial service providers to ensure that firms are meeting appropriate standards in terms of market conduct, consumer protection and financial crime controls, such anti - money laundering. so far this year, our consumer protection directorate has carried out some 77 inspections over eight themes, including an inspection on product design and selling, on openness and transparency and on current account switching. over the last 18 months, the central bank has targeted over a dozen investment firms and subjected them to a heightened level of prudential supervision. in some cases, this work has been augmented by themed inspections on consumer protection matters. in almost all cases, issues were identified requiring outcome focused mitigating actions ranging from improved governance arrangements to revocation of authorisation. themed inspections will continue to be an important supervisory tool, and going forward, we will publish our intended thematic work plan. a themed inspection focuses on a specific topic rather than on a range of topics and is usually carried out on a number of relevant regulated firms or on firms that represent a significant proportion of market share – in line with our riskbased approach. themes and firms for inspection are selected based on our market intelligence from a range of sources, including issues noted during on - going supervision, complaints received and referrals from the financial services ombudsman