Sharon Donnery: Risks, resilience and policy responses to Covid-19

Remarks by Ms Sharon Donnery, Deputy Governor of the Central Bank of Ireland, at the Institute of International and European Affairs (IIEA), 17 June 2020.

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

Introduction

Good morning, it is a pleasure to address the Institute of International and European Affairs.

Today I will speak about the macro financial environment in Ireland amid Covid-19, the risks to Irish financial stability, both domestic and international, the resilience of the economy and financial system that was built up over the last decade, and the recent policy responses that we have taken at the Central Bank of Ireland and with our colleagues in Europe.

The key message is that while we have built up resilience in the financial system over the last decade, we have only seen the initial economic effects of the pandemic materialise so far. There remains significant uncertainty on the path of the virus, the duration of the shock and the economic implications. Ensuring our policy responses promote a sustainable contribution from the financial system so that it can absorb and not amplify the shock of COVID-19, will remain to the forefront of our minds at the Central Bank.

COVID-19 - An exceptional shock

COVID-19 is fundamentally different in nature and scope to previous economic shocks, certainly in my living memory.