risk of an managing failure ; and macro prudential tools to enhance lender and borrower resilience. building on these foundations and through delivering assertive, analytical, outcomesfocused, risk - based supervision, underpinned by a robust regulatory framework and the credible threat of enforcement, we will employ multi - year supervisory strategies by firm or by sector ( for lower impact firms ) to : address the remaining issues from the financial crisis with finality, including the high level of non - performing loans ; drive further improvements in the governance, culture, diversity and risk management of firms, so they are better able to demonstrate capability to identify, manage and mitigate the risks that they face ; drive enhancements in it risk management and operational resilience across all firms ; and enhance firms ’ ability to recover, progress resolution planning and our own financial crisis preparedness and management capability. we must and will look forward. for example, threats to operational resilience of individual firms and the system as a whole continue to increase and grow more complex. in a connected way, the opportunities and challenges presented by innovation continue to grow. i expect regulated firms to be actively considering and acting on these issues, and the central bank will be ensuring that you are, with the aim of ensuring that regulated financial services firms : have sufficient financial resources, including under a plausible but severe stress ; have sustainable business models over the long - term ; are well governed, have appropriate cultures, with effective risk management and control arrangements, and can recover if they get into difficulty, and if they cannot, are resolvable in an orderly manner without significant externalities or taxpayer costs. i also expect regulated firms to be looking forward, to be anticipating future significant risks and opportunities to ensure that they remain resilient over the long term. this is not sufficiently 3 / 9 bis central bankers'speeches evident. to take one example, climate change needs to move higher up the agenda of the irish financial services system. the effects of climate change could result in serious impacts for financial services firms, with climate related financial risks acting as a driver of other risks, including market, credit and operational risk. the physical risks that arise from events like storms, floods and droughts can result in damaged properties leading to lower asset values and creditworthiness. in addition, as society adjusts to a low - carbon model, the risks of being exposed to assets, which would no longer be able to recover their investment as intended, could lead

ed sibley : safety and soundness - strategic priorities for the next three years address by mr ed sibley, deputy governor ( prudential regulation ) of the central bank of ireland, to the banking & payments federation ireland ( bpfi ) risk management " future supervisory landscape ", dublin, 17 january 2019. * * * good morning ladies and gentlemen. i would like to thank the banking & payments federation ireland for the invitation to speak here today, at this conference on the “ future supervisory landscape. ” my role often requires that i take a somewhat pessimistic perspective, that i consider downside risks, and ask questions such as what can or is going wrong. however, i am an optimist at heart, particularly at this time of the year, when days are getting a little longer, plans are freshly minted, new year ’ s resolutions are not yet totally forgotten, and we have high hopes for the year ahead. so, with this in mind, together with the topic of the conference, my focus today is primarily on looking forward. having said that, i am also a keen student of history. “ history carries good lessons to all who heed them ” 1, and so in order to look forward we need to be cognisant of where we are today and the lessons from the past. in this context, it is worth remembering that financial crises recur. there is evidence, that this is somewhat attributable to the pro - cyclical approach to regulation, which research shows is often weakened in a highly damaging way at the top of the cycle at precisely the moment that it needs to be strongest. the effect of the “ regulatory pendulum ” has been a feature of financial booms and busts. it is important then that we do not let memories fade. we must recognise the important role of strong regulatory and supervisory frameworks in delivering a resilient financial system. 2 with all this in mind, i will focus on the central bank of ireland ’ s ( “ central bank ” ) strategic priorities for the next three years3, particularly in the context of the safety and soundness of the financial system. by covering our five strategic priorities with this prudential lens, i will note that there has been considerable progress in enhancing the resilience of the financial system, and the banking system in particular, but there is much more to be done to deliver a trustworthy financial system that is sustainably serving the needs of the economy and its