Gabriel Makhlouf: Managing risk, rebuilding resilience

Remarks by Mr Gabriel Makhlouf, Governor of the Central Bank of Ireland, at the European Financial Forum, virtual event, 11 February 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

It is a pleasure to address the Forum again this year.  I am delighted that the organisers have managed to ensure it goes ahead virtually, to give us all the opportunity to engage and communicate with one another. I will return to the theme of engagement later on in my remarks.

Reading the overview for this year's Forum, some key themes immediately jumped out at me: the reshaping of the financial sector, digital transformation, financing the transition to a more sustainable future, the need to "build back better". While the pandemic has amplified some of these issues, none are new. And they're all relevant to all segments of the financial services industry, and indeed the Central Bank of Ireland.

We have seen a lot of change in the financial sector over the last decade, not least the rapid growth in market-based finance in Ireland and internationally.  And the pace of technological change is something I have spoken about before. Financial institutions have little option but to adapt to these changes if they want to be successful.

The resilience built-up in recent years put the financial system in a better position to absorb the shock from the pandemic, supporting households and businesses. It has been drawn upon heavily over the last 12 months and over time, we will need to restore it.  In fact, we will need to ensure it is ready for new challenges, perhaps "building better for the future" as the transition to a low-carbon economy will require adjustments by all of us, households, businesses and policymakers.