Tava Loans - Central Bank of Ireland Issues Warning on Unauthorised Firm

Ava Credit Finance - Central Bank of Ireland Issues Warning on Unauthorised Firm

Mr Philip Smith, former Chief Executive Officer (CEO) and Executive Director of RSA Insurance Ireland DAC disqualified for 13 years by the Central Bank of Ireland for his admitted participation in a breach of financial services law by RSAIIOn 1 December 2025 the Central Bank of Ireland reprimanded Mr Smith and disqualified him for 13 years from being a person concerned in the management of a regulated financial service provider for his participation in a breach by RSA Insurance Ireland DAC (RSAII or the Firm) of Article 13(1)(a) of the European Communities (Non-Life Insurance) Framework Regulations 1994, S.I. No. 359 of 1994 (the 1994 Regulations) (the Prescribed Contravention).Article 13(1)(a) requires insurance undertakings to maintain adequate technical reserves in respect of all underwriting liabilities. RSAII was previously fined in 2018 for the Prescribed Contravention having admitted that on 30 September 2013, there was a significant shortfall in its technical reserves resulting from the under-reserving of 17 large loss claims.1 Large Loss Claims, due to the severity, nature and/or extent of the insured event, represent a significant liability for insurance undertakings. RSAII’s procedures required large loss claim reserve estimates to be assessed by claims handlers and the recommended claim reserve estimate to be recorded on RSAII’s claims database. The accuracy of this information was critical for the proper calculation of RSAII’s technical reserves. Instead for certain large loss claims Mr Smith, while CEO, oversaw a process whereby claims handlers were prevented or delayed from recording their recommended estimates on RSAII’s database (the Under-Reserving Process). As a result of the claims estimates on the database being understated, the technical reserves did not reflect the Firm’s estimated liability for certain large loss claims creating a risk that RSAII might not have been in a position to pay claims made by and against its policyholders.The under-reserving of these large loss claims contributed to RSAII requiring a significant capital injection from RSA Insurance Group PLC in 20132. This included an increase to RSAII’s technical reserves to take account of the 17 large loss claims that were subject to the Under-Reserving Process. While RSAII’s failure to maintain technical reserves posed a significant risk of loss to policyholders, the investigation did not find evidence of any actual loss.Maintaining sufficient reserves to meet underwriting liabilities is the cornerstone of conducting business in all insurance entities. The period of disqualification imposed on Mr Smith reflects the seriousness of the breach he participated in and shows that where senior executives break the rules and put policyholders at risk, they will be held accountable.There are statutory limits on the Central Bank’s sanctioning powers. These include that the Central Bank is not allowed to impose a fine that would be likely to make a person bankrupt.3 The Central Bank considers that Mr Smith’s participation in this breach also merits a monetary penalty of €120,000. However, as part of the settlement process, Mr Smith submitted sworn information detailing his financial circumstances. Following a thorough analysis of this information, the Central Bank determined that Mr Smith’s financial circumstances are such that the Central Bank cannot impose a monetary penalty.Colm Kincaid, Deputy Governor, has commented as follows:“The actions of directors and senior executives shape the conduct and operating culture of the firms they lead – none more so than the CEO. For consumers of financial products, including policyholders, to have trust in financial services, they need to be confident that their best interests will be secured. These consumers rely on directors and senior executives to manage their businesses in a way that not only adheres to the rules but builds an effective organisational culture based on standards such as professionalism, integrity and accountability to deliver fair outcomes that have the interests of consumers at heart.Since the period to which today’s announcement relates, Ireland has enhanced the statutory framework for the accountability of senior individuals in financial services firms through the Central Bank (Individual Accountability Framework) Act 2023. These enhancements support the ultimate goals of better outcomes for consumers and a more sustainable financial system by driving higher standards of behaviour for individuals in financial services firms.”Mr Smith’s Role in the BreachMr Smith was CEO of RSAII from 2009 to 2013. The Enforcement investigation identified that:From 2009, Mr Smith became increasingly involved in approving changes to claim reserve estimates for certain large loss claims. Prior to Mr Smith’s involvement, this activity was typically undertaken by RSAII’s Claims Function. Mr Smith attended, and participated in, frequent and undocumented meetings with certain members of senior management, the purpose of which was to discuss recommended increases to certain large claim reserve estimates and to get Mr Smith’s approval for the recording of the recommended increases. There was no governance for these meetings and no record of the discussions that took place or the decisions made. At Mr Smith’s direction, much of the Under-Reserving Process operated through in person meetings and hard copy records only.At these meetings, despite being made aware of the reserve estimate recommended by a claim handler, Mr Smith frequently did not approve the recommended amounts.As a result, over an extended period, the claim reserve estimates recorded for certain large loss claims were significantly lower than the recommended claim reserve estimates. Further, several large loss claims remained at an initial standard reserve estimate despite Mr Smith being aware that the potential liability far exceeded this amount.Mr Smith’s participation in this practice contravened RSAII’s standard approach to large loss claim reserve estimation and circumvented RSAII’s policies for claims estimation.To give an example of how the Under-Reserving Process operated, a claim relating to a serious motor accident had a recommended reserve claim estimate of €2.7 million however, the claim was recorded on the database with a reserve estimate of just €20,001 with the result that RSAII’s potential liability appeared “on paper” to be far less than it was. The under-reserving also contributed to the in the artificial inflation of the Firm’s reported profits.Mr Smith as CEO and an executive director of RSAII, held a position of significant trust and accountability. He bore ultimate responsibility for driving a culture of good governance and regulatory compliance in RSAII but he materially failed to discharge that responsibility. Instead, he oversaw an undocumented process which circumvented controls and put policyholders at risk.Sanctioning FactorsIn determining the appropriate sanction for Mr Smith’s participation, the Central Bank has considered the guidance on the sanctioning factors set out the ASP Sanctions Guidance (November 2019).4 The following factors are relevant in this case:The nature, seriousness and impact of the contravention:Mr Smith actions materially contributed to RSAII’s failure to maintain technical reserves in accordance with the 1994 Regulations.Mr Smith’s actions constituted a deliberate circumvention of RSAII’s policies for claims estimation.Mr Smith’s actions represent a significant departure from the standard required of a CEO and executive of the board of a regulated financial service provider. As CEO of RSAII, Mr Smith had ultimate executive responsibility for ensuring that RSAII complied with its legal and regulatory obligations, including the requirement to maintain technical reserves in respect of all liabilities assumed by RSAII. Under RSAII’s Delegated Authority Framework, the Board of Directors delegated the highest level of operational, financial, non-financial and insurance authority to Mr Smith. Mr Smith thereby held the most significant position of responsibility and accountability in RSAII and materially failed to meet the standard expected of that position.RSAII’s failure to maintain technical reserves in accordance with the 1994 Regulations, as a result of the Under-Reserving Process, posed a significant risk of loss to policyholders.The under-reserving of large loss claims resulted in a material understatement of RSAII’s liabilities and ultimately contributed to RSAII requiring a significant capital injection. Had RSAII been unable to secure capital from RSA Insurance Group PLC to address the shortfall in the technical reserves, the potential impact of the breach on the financial markets and public confidence in those markets was significant given RSAII’s position in the Irish insurance market at the time.The previous record of the individual:No previous enforcement action has been taken against Mr Smith.Other general considerations:The imposition of sanctions in this case is designed to have a deterrent effect on Mr Smith and on others holding senior positions in the regulated financial services sector.The Inquiry Into Mr Smith’s ParticipationThe Enforcement investigation in respect of Mr Smith commenced in 2014 in parallel with the investigation into RSAII and certain other persons. This comprehensive review of RSAII and certain of its senior leaders required the analysis of significant volumes of hard copy and electronic data and extensive interviews with RSAII staff to fully understand the operation of the Under-Reserving Process which, by its nature, was not documented and was in conflict with normal operations and controls in RSAII.This investigation culminated in a concluded Administrative Sanctions Procedure (ASP) against RSAII in 2018 and against RSAII’s former Chief Financial Officer in 2020.5 Separately, a five-year prohibition was imposed on RSAII’s former Chief and Signing Actuary. As part of a wider set of facts, he accepted that he facilitated an undocumented practice during his time at RSAII, which resulted in a significant shortfall in the firm’s reserves in 2013.6Where wrongdoing is identified, the Central Bank will use the full extent of its powers to pursue cases to their conclusion and to hold relevant individuals to account. Consequently, in November 2022, the Central Bank decided to hold an Inquiry to determine whether Mr Smith had participated in the commission of a breach of Article 13(1)(a) of the 1994 Regulations by RSAII.The Hon. Mr Justice Iarfhlaith O’Neill, Dame Elizabeth Neville and Mr Graham O’Brien were appointed to the Inquiry panel. Between February 2023 and October 2025, the Inquiry held 10 Inquiry Management Meetings to address legal and procedural issues, including whether the Inquiry would proceed in public or in private, the role of RSAII in the Inquiry, the scope of the Prescribed Contravention and the disclosure of documents. The substantive Inquiry hearing was scheduled to commence in January 2026.The Inquiry had been proceeding in private but recently directed that it would move to public hearing. Further details of this Inquiry are available on the Central Bank's website. This settlement concludes the Central Bank’s Inquiry into Mr Smith under Part IIIC of the Central Bank Act 1942. The Central Bank wishes to thank the Inquiry Members for their dedicated work throughout the course of this Inquiry.Details of the costs incurred by the Central Bank in connection with this Inquiry are available on the Central Bank's website.Notes to EditorsThis is the Central Bank’s 163rd enforcement outcome to date.This case followed the settlement process for ASPs in place prior to the amendments made to Central Bank Act 1942 by the Central Bank (Individual Accountability Framework) Act 2023 (the IAF Act). In accordance with the transitional provisions in section 94 of the IAF Act, the sanctions imposed on Mr Smith do not require the confirmation of the High Court to take effect. The period of Mr Smith’s disqualification therefore takes effect from 1 December 2025.While the settlement procedure offers an alternative, efficient means to conclude ASP cases, the Inquiry is the key statutory ASP mechanism by which the Central Bank can assess suspected breaches, make relevant determinations and impose sanctions. The Inquiry is comprised of one or more impartial decision-maker(s), appointed by the Central Bank to hear evidence. The Inquiry’s function is ultimately to determine whether the suspected breach(es) occurred or is/are occurring and, if so, to determine the appropriate sanction(s). Further information on Inquiries, and Inquiries to date, is available on the Central Bank’s website.Article 13(1)(a) of the 1994 Regulations required all insurance undertakings to establish and maintain technical reserves in respect of all underwriting liabilities assumed by it.The Solvency II Directive was transposed into Irish Law as the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. 485 of 2015) and the legislation entered into force on 1 January 2016. The Solvency II framework sets out strengthened requirements around capital, governance and risk management in all EU authorised (re)insurance undertakings. Solvency II also introduces increased regulatory reporting requirements and public disclosure requirements. These requirements are intended to reduce the likelihood of an insurer failing and should also provide policyholders with increased protection. Further information on Solvency II can be found here[1] On 18 December 2018, the Central Bank reprimanded and imposed a fine of €5,000,000 on RSAII, which was reduced to €3,500,000 with the application of the settlement discount. This related to four breaches of financial services law, including the failure to establish and maintain technical reserves in accordance with Regulation 13(1)(a) of the 1994 Regulations. The settlement with RSAII[2] Per the settlement concluded with RSAII in 2018, the under-reserving of these large loss claims amounted to €29,300,070.[3] Pursuant to section 33AS(2) of the Central Bank Act 1942 (as amended).[4] The Central Bank issued revised Sanctions Guidance as part of the Administrative Sanctions Procedure Guidelines in December 2023. However, the Administrative Sanctions Procedure Sanctions Guidance 2019 continues to apply to this case - see Note 2 in Notes to Editors.[5] The settlement with Mr O’Connor[6] The prohibition notice in respect of Mr Ryan

Good evening.  Thank you for the invitation to join you today.This evening I want to talk about economic resilience, what it is and whether we have enough of it. I spoke about economic resilience in my first speech as Governor – 6 years ago – and wrote to the Minister for Finance about it in early February this year.  After everything that’s happened since February, it feels timely to take stock of where we are.  My conclusion is that we need to give it greater focus.Let me start by setting out three propositions.First, successful economies need a stable and sustainable macroeconomic framework, sound monetary policy that delivers stable and predictable prices, a prudent fiscal policy and debt that’s under control.  Successful economies are also characterised by well-regulated financial systems and well-functioning markets.Second, change is a constant and economic resilience is, in essence, the ability of an economy to manage change, whether it is to withstand or recover from the effects of shocks, or the more gradual evolution to a different state. Third, resilience is built, not granted, and requires constant investment in economic capital which consists of physical, human, social and natural capital.  Those four components generate flows of tangible and intangible benefits that build resilience.  Ultimately, the growth and distribution of our economic capital – and the ensuing resilience – support societies to prosper and generate longer-term or intergenerational wellbeing.A snapshot of Ireland’s economy today paints a positive picture.  The last set of Central Bank projections back in September – the next set are due next week – described an economy growing steadily with employment up 2.3 per cent in the year to Q3 2025 and with unemployment remaining low. The State’s books are in good order: the Government’s Budget forecast a headline surplus of 3 per cent with debt at 62 per cent of modified national income (GNI*).  The latest Exchequer returns point to continued strong growth in tax receipts, fuelled in particular by corporation tax.  In fact, The Economist has just ranked Ireland as one of the world’s best performing economies this year.But of course a snapshot is just that.  What matters is the bigger picture, and the horizon.  That is somewhat cloudy, and somewhat worrying.Major global policy shifts this year have added to the economic uncertainty which came from Russia’s war in Ukraine, geopolitical tensions more generally and the slow but growing fragmentation of the global economy over the past decade.  And closer to home, you won’t be surprised to hear me say that Ireland is over-reliant on corporation tax – and from a small number of firms – which this year is set to account for one third of overall Exchequer revenue. Uncertainty is not a new phenomenon, and history teaches us that periods of change are the norm, not the exception. For example, from a technological perspective, take the last 250 years and the advent of the steam engine and the Industrial Revolution itself.  We saw productivity enhanced as well as the upending of the global economic way of doing business. Centuries-old industries were extinguished in a matter of years, social dynamics evolved rapidly with wealth and income inequality growing at a rapid pace alongside the redrawing of political and financial institutions to cope with the rapid urbanisation and mechanisation of society. From a geopolitical perspective, the Napoleonic Wars and the subsequent Congress of Vienna reshaped trade and political maps for over a century in Europe.   The Great Depression and the two World Wars on either side of it altered trading relationships and fragmented previously-strong geopolitical relationships which ultimately led to the creation of global institutions such as the UN, IMF and World Bank to restore stability and trust.  And of course, perhaps most of all, the creation of what is now the European Union, a peace project like no other and which has brought economic benefits to millions of people across the continent.These relatively modern historical precedents – I am resisting the temptation to go back further in history – act as a reminder that today’s challenges – from economic crashes, geopolitical tensions and the fragmentation of economic relationships – are simply new iterations of an enduring message. As someone once said, “there is nothing more certain and unchanging than uncertainty and change”.1As we face into a period of further uncertainty, both from geopolitical transitions and the more familiar transitions of an ageing society, a changing climate and rapid technological innovation, the importance of economic resilience stands out.  Economies must be resilient and robust enough to withstand the ‘Knightian uncertainty’ – when it is difficult to assign probabilities to imaginable outcomes – that frequently impact on our lived reality.  Instead of allowing ourselves “fall into the role of a victim” of circumstance, we can and should take matters into our own hands.2 Current inflationary outlookBut back to my first proposition.  Successful economies need stable and predictable prices.  A year ago, inflationary pressures had eased somewhat, and it was becoming clearer that there would be a gradual convergence of inflation to our 2 per cent target during 2025.  The latest projections – from September – and the incoming data that I have seen so far lead me to feel confident that inflation will be at target over the medium term, in line with our price stability objective (although, again, there will be a new set of projections next week incorporating the latest data and information).  Economic resilience prioritiesMy second and third propositions were about the constancy of change and the need to build resilience – specifically by investing in economic capital – to help manage the effect of shocks or the gradual transition of an economy to a different state. I want to talk about three areas that deserve focus and attention if we are to strengthen our resilience: addressing our infrastructure needs, realising Europe’s potential and building a new rules-based order.  Ireland’s infrastructureOn infrastructure, I suspect that everything that needs to be said about the country’s needs has already been said, by me, by people in this room, by business, by the community in general and by Government.  I welcome the Government’s focus on infrastructure, the resources it has committed to it and the emphasis it has placed on speed. But I want to add one thing.  As we address the country’s housing, transport, telecommunications, energy and water needs, we also need to plan for the shocks that could be created by bad actors.  Security considerations need to feature increasingly in our planning for economic resilience, something that we have already started by our focus on the operational resilience of the financial system.Europe’s potentialAgain, you might think that everything that needs to be said on realising the benefits of Europe’s Single Market has also already been said.  But I am not so sure.  At this very moment, the European economy stands at a crossroads. If we want to have a modern, innovative, integrated and productive European economy that realises its potential, that is prepared for tomorrow’s challenges, and that is delivering for its citizens, then we need to choose a different path than the one we appear to be on.  Mario Draghi’s and Enrico Letta’s reports make that clear.3 The IMF has explained the impact that the barriers within the Single Market are having.  They estimate that the internal barriers within the Single Market are equivalent to a 45 per cent tariff on goods. And a 110 per cent tariff on services.Addressing these issues will also enable a step change to leveraging the potential in Europe’s capital markets and mobilising the vast savings potential across the Union, unlocking the €11.5 trillion held by Europeans in deposits and cash and channelling it to drive European innovation, while maintaining our resilience in the face of future potential shocks.  Multilateralism and embracing a new rules-based orderUnlike Irish infrastructure and Europe’s Single Market, not everything that needs to be said about the third area I want to talk about today has been said.  But the evidence is reasonably clear. The rules-based international order that has been a feature of the last 80 years is now facing unprecedented strain.  Arguably it has already stopped working in the way we expected it to.  Policy-induced geoeconomic fragmentation has moved from being a risk to becoming a reality, affecting trade and foreign direct investment flows.  The journey to greater fragmentation has accelerated this year with the return to tariff levels not seen for a century.  Familiar and comfortable paradigms have been turned on their heads.  As a small, open economy, Ireland finds itself at the crossroads of these geopolitical headwinds, deeply exposed to the challenges and complexities.  I am not going to suggest that the old framework was perfect.  But I’m happy to argue that open markets, free trade and an integrated global economy have delivered the biggest increase in living standards in human history.   My experience at the G20 this year has reinforced my belief that many countries recognise the benefits of global trade and the value of an international order that is based on transparent rules rather than on economic and military power.  The process that took us to the General Agreement on Tariffs and Trade and then on to the World Trade Organization needs to be revived and renewed.  We should not resign ourselves to “suffer the slings and arrows” of events but instead look “to take arms against a sea of troubles”4 and develop a new set of multilateral rules that deliver the certainty, stability and prosperity that our businesses and our communities want.  Keep existing frameworks where they are working well but be ready to create new ones if need be.  Put your energies towards building new relationships; resist the temptation to “rage, rage against the dying of the light”5 especially if a new light is waiting to be turned on. ConclusionLet me conclude.  We need to build economic resilience if we are  to support communities through economic transitions, and if we are to manage the radical uncertainties that characterise our age.  Ireland and our partners in Europe are undergoing significant economic transitions in climate, in demography, in technology and in the way we work with our global partners.  These transitions are having and will have an impact on our societies.  Building resilience to meet the challenge they pose is a process that involves individuals, households, businesses and policymakers adapting to – and shaping – the context in which they live and operate. The more resilient our economic capital, the greater the opportunities and capabilities citizens have to live the lives they have reason to value.  We should focus our energies  towards the challenge of shaping the world ahead of us, rather than seeking to preserve an old order. The stage is now set for building new relationships, adopting new frameworks, and creating new paradigms for the world that our children and grandchildren will inhabit. Or as I remember from a poem, “The art of walking upright here is the art of using both feet. One is for holding on. One is for letting go.”6[1] John F. Kennedy[2] Olaf Sleijpen, DNB President, remarks at the Financial System Conference 2025[3] Draghi & Letta Reports [4] To paraphrase Shakespeare[5] Dylan Thomas[6] Glenn Colquhoun, The trick of standing upright here

New report outlines the Central Bank’s approach to more effective and efficient regulatory and supervisory framework, reducing complexity and improving clarity while maintaining resilience and important protections in the system.This work builds on the Central Bank’s strategy to transform regulation and supervision, including the introduction of our new integrated supervisory approach and the improvements made in our gatekeeping processes in recent years. The roadmap sets out a comprehensive multi-year programme of initiatives to deliver further efficiencies and effectiveness across regulation, supervision, gatekeeping and reporting.  While proactively engaging in this work, the Central Bank have been clear we are not reducing standards or supervision, and will continue to respond to the changing financial system and risk landscape.Central Bank of Ireland today published “Regulating & Supervising Well – A More Effective and Efficient Framework”. The report outlines how the Central Bank will, in line with initiatives across Europe, enhance the effectiveness and efficiency of its supervision and domestic regulatory framework, improve gatekeeping processes, and deliver a more integrated and less burdensome reporting and data framework. These initiatives form part of a multi-year programme aligned with the Central Bank’s strategic commitment to transform regulation and supervision in a rapidly changing financial environment.Governor Gabriel Makhlouf said: “A well-functioning financial system is essential to a well-functioning economy. As Europe focuses on improving competitiveness and resilience, there is a clear opportunity to streamline rules and processes without weakening the important protections we have built over the past decade.“Our objective is straightforward.  We are making regulation and supervision more effective, easier to navigate, proportionate, and aligned with risk, while maintaining the resilience and safeguards that underpin people’s trust in the financial system. “Streamlining is not about lowering standards. It is about improving quality, coherence and clarity, ensuring the regulatory framework works for consumers, firms and the economy.”The report outlines the Central Bank’s work across four pillars:SupervisionThe Central Bank’s new integrated, risk-based supervisory approach, introduced earlier this year, brings together multidisciplinary teams, sharper risk focus, and clearer supervisory communications. This delivers more coherent engagement with firms, stronger proportionality and streamlined supervisory processes.RegulationThe Central Bank is updating its domestic rulebook, retiring or consolidating outdated provisions, and aligning national requirements with evolving EU frameworks. Some key initiatives include:A major compatibility review of insurance regulations to eliminate duplication with Solvency II reforms;In addition to international work, review domestic banking rules that pre-date CRD V/CRR;Following simplification of the Credit Union Lending Framework, updating the Credit Union HandbookChanges to the AIF rulebook and UCITS regulation and a full review of the Fund Service Provider Framework;Updated cross-sectoral guidance on operational resilience, outsourcing and governance.A new Regulatory Impact Assessment FrameworkGatekeepingBuilding on improvements already delivered, including shorter processing times and clearer expectations, the Central Bank will establish a Gatekeeping Division to further enhance consistency, transparency and timeliness across authorisations and Fitness & Probity processes.Reporting and DataThe Central Bank is undertaking a comprehensive review of domestic reporting requirements, introducing a discipline-by-design model to ensure all data collections are purposeful, proportionate and non-duplicative. This work aligns with European initiatives to streamline bank reporting and reduce unnecessary burden.Mary-Elizabeth McMunn, Deputy Governor. Financial Regulation stated: “The financial system is evolving rapidly, and regulation must evolve with it. As part of our work, we have engaged with and listened to feedback from stakeholders, including the financial services sector.  Our focus is on being risk-based, future-focused and outcomes-driven, ensuring firms understand what is expected, and that our frameworks support sustainable innovation and growth.“Success will be a regulatory system that is clearer, more coherent and more proportionate, while continuing to protect consumers, investors, and hard-won financial stability.  We will continue to engage in robust risk-based supervision; and to take enforcement action as necessary; and if changes to the risk landscape mean we have to introduce new rules or requirements, or engage more with firms or sectors, we will do so.“Regulating and supervising well is an ongoing commitment from the Central Bank, and we will continue to adapt as risks, markets and technologies evolve.”ENDS

Obelisk Wealth - Central Bank of Ireland Issues Warning on Unauthorised Firm

Good morning and welcome everyone.  I am delighted to address the eighth meeting of this Forum.When the Forum was established three years ago, the goal was to bring together participants from across Ireland to build a shared approach to understanding and managing the systemic risks that climate change poses, while supporting the orderly transition of households and businesses to the net zero objective that we’re all familiar with. The Forum has come a long way in those three years.  We have established cross-sectoral working groups across risk management, capability building and, most recently, data and disclosures.  The groups have produced a number of reports and facilitated sharing of knowledge and best practice.    In Ireland emissions have fallen by 10 per cent since the Forum first met while emissions from energy are down 28 per cent.  Change is happening – and in some areas it is happening at pace – but we are told that the country is not on track to meet its 2030 targets.  The task of achieving the fundamental and deep-rooted transformation of our economy is still very much in front of us, and I haven’t mentioned the proposed EU targets for 2040 which is 15 years away, less time than the first iPhone is behind us.  The availability of financing for this transition will be a very important determinant for success.In recent years, legal frameworks have been developed to support the transition. However, these frameworks are complex and financial flows to sustainable activities are estimated to be approximately a quarter of what they need to be by 2030.1Financial firms have taken steps to manage climate and environmental sustainability risks. But maturity varies across firms and more is needed to embed risk management in strategic decisions, and to identify opportunities and take action. My remarks today will focus on four areas.  I will:Provide my perspective on climate risk and sustainable finance in Ireland and the EU, and the progress that has been made to dateHighlight the need to ensure climate action remains a priority for the financial sector, and emphasise the Central Bank’s focus on climate risk and sustainable financeExplain the need for a focus on tangible outcomes that support the transition and adaptationEncourage this Forum to continue to promote a collaborative approach to how the financial sector supports the transition and adaptationProgress to dateFirst, to progress.  There has been some progress although the focus and momentum that built around sustainable finance in recent years is slowing as resources are diverted to other topics and priorities perceived to be more urgent, newer, more profitable or more likely to curry favour or less displeasure.Through participation in the G20 this year, I have seen first-hand how changing political priorities have diverted efforts away from addressing climate change.This would not be a problem if we had just discovered that what Nick Stern told us around 20 years ago, and other scientists before and after him, was wrong.  But we haven’t, he wasn’t and they weren’t.We should recognise that the science hasn’t been ignored completely.  We have seen tangible outcomes from worldwide action.  Global greenhouse gas emissions are now projected to be around 12 per cent below 2019 levels in 2035. This compares to a projected increase in emissions of between 20-48 per cent, before the adoption of the Paris Agreement.We are no longer on a trajectory towards the very worst-case scenarios that were once feared.Between 2021 and 2024, assets in sustainable funds2 in Europe have increased from €3.7tn to €9.1tn and have increased as a percentage from 25 per cent to 52 per cent of total fund assets. Green mortgages now make up 40 per cent3 of new lending in the Irish market, and since the launch of Irish Sovereign Green Bonds in 2018, a total of €11.5bn has been allocated to green projects4.However, since this period of expansion we have seen some headwinds to sustainable finance, partly from political pushback but also because some sustainability products appear not to deliver on their claims.  For example, research indicated that one third of sustainable funds studied had exposure to fossil fuel companies, amounting to an investment of €123bn. The incentive for greenwashing remains, which is a somewhat polite way of saying that we need to watch out for snake oil salesmen5.Of course I recognise that the complexity of implementing sustainable finance, such as embedding complex new regulations, processes and systems, and collecting data to understand the risks, has also hampered progress. Sustainable finance needs to move onto a new, mature phase where it is less about statements of commitment and more about action and outcomes.  So how do we get there? First, to state the obvious, we need to build trust in sustainable finance: we need to ensure that products deliver on their promises and finance goes to where it is needed. This will broaden the transition into market segments that have yet to make significant progress. And second, we need to maintain a focus on the management of climate risk, as well as increasing the focus on climate change mitigation and adaptation.Maintaining momentumIn other words, we need to maintain momentum.  The global macroeconomic costs of climate change are material.  Under a scenario consistent with current nationally-determined contributions, the level of global GDP would be 13 per cent lower by 2050.The macroeconomic costs of taking action to reduce greenhouse emissions are much smaller than the costs associated with inaction.  Ongoing analysis within the Bank on options for recycling revenue from carbon taxes also indicates that there are policy choices that can reduce the costs, and enhance the benefits, of that transition.We are already seeing the impacts of more frequent extreme weather events around the world and here at home.  Such events are much more likely as a result of climate change.The world is getting closer to – and in some reports, even crossing – climate tipping points where parts of the Earth’s systems could be pushed into abrupt or irreversible change6.Ultimately, it is because climate change poses risks to these systems – which provide us with food, water, energy and raw materials – that addressing these risks remains a strategic priority for the Bank.With this in mind we recently updated our climate and sustainable finance strategy.  We’re focusing our work programme on three key aspects:Building financial resilience, both at microprudential and macroprudential levelConsistent with our economic advice mandate, informing national climate policy through data, research and even greater collaboration on the macro-financial aspects of climate change and the transition to net zero; andEnabling the financial system to play its role in transition.In relation to building financial resilience, we are continuing to embed climate risk management and supervision of sustainable finance into all aspects of our supervisory work.  As I hope many of you will be aware, I wrote to the chairs and CEOs of all regulated firms in November 2021 setting out the Central Bank’s supervisory expectations in relation to climate issues.  Those expectations haven’t changed.  Firms are expected to:Demonstrate clear ownership of climate risks affecting the firm, and promote a culture that places emphasis on climate and other ESG issuesUnderstand the impact of climate change on their risk profile, and embed it in risk management frameworksUndertake scenario analysis to understand the potential impacts of climate changeDetermine the impact of climate risk (and opportunities) on their risk profile, business strategy and long-term sustainability, which should inform strategic planningBe transparent about what they are doing, including not engaging in greenwashing.We have seen meaningful progress against many of these topics. Financial institutions have enhanced board oversight, gradually incorporating climate factors into their strategies and risk frameworks, and developed scenario analyses and transition plans.However, progress has been uneven, and we have seen that maturity varies across sectors and across firms. Many institutions remain at early stages of quantitative assessment, have limited data availability, or lack the analytical capabilities needed to quantify exposures and model forward-looking climate impacts. There continues to be gaps in data availability, scenario modelling capabilities, and the systematic incorporation of climate change risks. I expect firms to build on the progress they have made.  Regulated firms should continue to build capacity, both in terms of knowledge and data, in order to better understand and manage the risks that climate change poses to their business.  In particular, firms should deepen their understanding of the potential impacts on the long term sustainability of their business model. And regulated firms should continue to deliver sustainable products in a clear and transparent way that meets the needs of investors and consumers. Real world outcomesSo while progress has been made, there is still more work to be done, not least to have a sharper focus on achieving tangible outcomes that support the real economy’s transition away from unsustainable activities.  And in such a transition, it is inevitable that business models will need to change.Transition planning will require long-term thinking through the current cycle. I should also add that I fully support the current efforts in the EU to remove unnecessary complexity from the sustainable finance regulatory framework.  The current framework is complex and presents challenges for financial market participants who want to support the transition.  We do not want to compromise the resilience of the financial sector or reduce important consumer protections but we do need to make a step change here.  I hope that the review of the Sustainable Finance Disclosure Regulation will deliver something that is less complex and more user-friendly for investors.Continuing to collaborateFinally, the importance of collaboration. One topic where there is a clear need for collaboration domestically is in relation to the flood insurance protection gap.  The report we published last year pointed out that 1 in 20 households in Ireland had difficulty in accessing flood insurance.  This number is only going to increase as flood events become more frequent and severe.  Not only will it affect the ability of these households to recover after a flood event, it will also have an effect on the wider economy, not least on the availability of mortgages and the wider housing market.There is a lot of work to be done but I am encouraged by initial discussions with the Department of Finance and the insurance industry on this topic. Finally, I hope that we can build on the contributions that this Forum has made in the last three years.  No doubt the Forum will evolve in response to the evolution of external events but in my view it will continue to have the potential to play an important role, particularly as the focus shifts to the practicalities of implementation and delivery of outcomes. By fostering dialogue, sharing knowledge and driving action, the Forum can help ensure that Ireland’s financial system is prepared to meet the challenges and opportunities of the climate transition.ConclusionThe path to net-zero is not linear but its necessity is clear: the costs associated with taking action to tackle climate change are much smaller than the costs associated with inaction. We must recognise that the journey to net-zero is, at its core, a real economy transition. The financial sector’s task is not just to manage the risks on its balance sheets, but to provide the incentives and the funding to ensure that households and businesses make the low-emission choices required to secure our collective future.My call to you is that we commit to staying the course together. This Forum has the potential to be a catalyst for the transition: sharing best practice, identifying data gaps, and taking action to support the wider Irish economy to deliver the real-world outcomes we need. [1] Climate Policy Initiative[2] Assets in Article 8 or Article 9 funds[3] Central Bank of Ireland Climate Observatory [4] The National Treasury Management Agency (NTMA) announces the publication of the Irish Sovereign Green Bond (ISGB) Allocation Report for 2024 and the Impact Report for 2023 [5] New NGO research uncovers massive greenwashing in European ESG funds  [6] The Planetary health check 2025” report, published by the Potsdam Institute for Climate Impact Research, shows that seven of the nine planetary boundaries have been exceeded.