Central Bank: Macro-Financial Review
This post was written by Philip Lane
The staff of Financial Stability Division of the Central Bank has put together a review of the macro-financial risks facing Ireland – it is available here.
The Macro-Financial Review provides a systematic overview of macro-financial conditions in Ireland and forms part of the Bank’s internal discussions about financial stability.
It is clear that, despite the exceptional scale of policy interventions domestically and significant progress in the stabilisation and restructuring of the financial system, its transition to a fully normal mode of functioning is not yet complete. In addition, there are risks which remain. This Review assembles some of the material which is kept under surveillance by the Financial Stability Division of the Central Bank. Naturally, the downside risks are focussed upon, but it is worth recalling that better-than-expected outcomes are also possible.
Policymakers are, of course, aware of these risks and, in addition to the extensive measures already taken, will continue to address and respond to the challenges posed by them on an on-going basis. The Review does not attempt to discuss or evaluate the overall policy measures that are in effect and currently under review to mitigate known risks.
While the document has been reviewed by the Bank’s Financial Stability Committee, the views expressed are those of the staff of the Financial Stability Division, which is responsible for its preparation.
It is made available to the public to heighten awareness of the current condition of the financial sector. It is hoped that by publishing it, the Central Bank will help decision-makers in the financial sector correctly evaluate risks and ensure that the risk management tools are appropriate and adequate.