Category: Central Bank of Ireland

Source: Central Bank of Ireland

01 April 2026 Speech

Good morning.

Ongoing events in the Middle East are a stark reminder of the challenges policy makers face in a world increasingly characterised by geoeconomic fragmentation.

For central banks tasked with preserving price stability, supply shocks pose both analytical and strategic challenges: understanding their persistence, their impacts on supply chains, and their effects on inflation and growth; and determining how to respond when supply and demand move in opposite directions. My speech today explains how I am thinking about both challenges.

The ECB Governing Council held rates unchanged at 2 per cent in March. I want to explain not just what was decided, but how I am thinking about the challenges, including where genuine uncertainty calls for caution and how we communicate this through scenarios.

My remarks are organised around three themes: the impact of the shock on the economy; calibrating the monetary policy response; and the key indicators that I will be monitoring.

Impact of the shock

A significant disruption at one of the world’s key energy supply chokepoints pushes prices up and output down, playing out over different time horizons.

The initial supply shock shows up in higher energy commodity prices, passing quickly into consumer and business energy costs. This is the direct effect. Indirect effects follow as businesses pass on higher input costs, contributing to cost-push inflation and broader supply chain disruption, which the 2021-23 period taught us can be difficult to identify in real time.  Second-round effects occur when nominal wages adjust to the new, higher price level.  In the euro area, where collective bargaining is widespread, wage formation can be slow, lagging the initial shock by several quarters. Countries that index wages to inflation – such as Belgium – or where annual wage agreements are the norm – such as France – see quicker adjustment.

The conflict also impacts demand through real incomes, investment, confidence, financial conditions, and global trade. Typically, this moves slower than the initial energy price shock, creating a growth headwind that could, over time, pull inflation down.

There is wide uncertainty about the conflict’s duration, which significantly affects the shock’s scale and persistence.

Initially, futures pricing suggested a short, sharp shock, with energy prices reverting to pre-war levels through late 2026 and 2027, closer to the baseline scenario in the ECB staff March projections (cutoff: 11 March).¹ However, as the conflict persists without clear resolution, a more prolonged period of higher prices becomes likely. This approaches the adverse scenario in the staff projections. The projections also include a severe scenario with bigger, more prolonged energy price increases.

The baseline scenario has oil and gas peaking around $90/barrel and €50/MWh in Q2 2026, then declining gradually. Under the adverse scenario, oil and gas peak at $119/barrel and €87/MWh in Q2, converging to baseline by Q3 2027. In the severe scenario, oil peaks at $145/barrel and gas at €106/MWh in Q2 2026, declining much more slowly and remaining significantly above both other scenarios.

Chart 1 places these scenarios in historical context. Currently, energy prices sit between baseline and adverse scenarios.  However, genuine uncertainty remains.  Both oil and gas volatility is well above long-run averages (Chart 2), though below historic highs. Risks are on the upside for inflation and on the downside for growth, especially through 2026.

Chart 3 illustrates how these scenarios feed through to inflation and growth. For inflation, the baseline shows 2.6 per cent in 2026 before returning to around 2 per cent in 2027/28. The adverse and severe scenarios see much stronger headline inflation at 3.5-4.4 per cent in 2026.  In the severe scenario, reflecting the more enduring shock, inflation remains well above target through 2027 (4.8 per cent) and 2028 (2.8 per cent). Core inflation shows less pass-through initially as it excludes energy and food prices, but indirect and second-round effects (mainly through wages) emerge significantly in 2027 and 2028.

GDP growth reacts quickly to higher energy prices, falling sharply in 2026.  Compared to December projections expecting growth around 1.2 per cent in 2026 – near the euro area’s growth potential – in the severe scenario, this falls by two-thirds to just 0.4 per cent.  Weaker growth lingers through 2027 before recovering somewhat in 2028.

The baseline projections include the market-implied path for policy rates as at the cutoff date of around two 25 basis point increases during 2026.  However, the adverse and severe scenarios make no further assumptions about the policy rate path. The Governing Council is determined to ensure inflation stabilises at our 2 per cent target in the medium term but we are not on a pre-determined path and have adopted, as I hope you all know, a meeting-by-meeting approach.

Monetary policy and supply shocks

Let’s turn to the monetary policy response.

The analysis of the 2021-23 inflation episode, carried out as part of the 2025 strategy assessment, contains important lessons.² The initial supply shock – pandemic-era bottlenecks, energy prices – led to more persistent inflation through indirect effects working through supply chains and lagged wage adjustment. With hindsight, policy models suggest interest rates could have risen slightly earlier – around one or two quarters – and more forcefully.³

So far, most attention has been on the direct effects of higher energy prices. This is expected, but we must also monitor downstream effects, particularly on energy-intensive goods production. Much of this passes through the Straits of Hormuz chokepoint, including chemicals, metals, fertilisers, and helium (crucial for semiconductor chips).

Our 2025 strategy statement builds on the learnings from the previous episode, including new data sources to understand how shocks pass through direct and indirect channels and second-round effects.  The expansion of the wage tracker toolkit is one example.

The explicit incorporation of scenario analysis into the projection framework to better convey uncertainties is another.  One question I’ve been asked recently is how exactly scenarios are used for calibrating euro area monetary policy.

First, a scenario differs fundamentally from a forecast.  A forecast is our best estimate given available information.  Scenarios are internally consistent illustrations of what could happen if energy prices evolve differently from the baseline. This distinction matters. When we have low confidence about a shock’s scale and persistence, including whether inflation dynamics have shifted structurally, a single point forecast gives a false impression of precision.  Scenarios reflect our assessment of current uncertainty.

How should scenarios be read?  For me, it’s not about choosing a preferred scenario but ensuring robustness, that our monetary policy approach performs well across potential outcomes.  Scenarios also signal our intention to calibrate responses as the shock develops, showing the Governing Council has thought carefully about each calibration. This aligns with President Lagarde’s ‘three cases’ approach: if the shock is limited and short-lived, look through to avoid doing more harm than good; if it causes a large but not overly persistent target overshoot, take a measured approach; and if inflation is expected to deviate significantly and persistently from target, respond more forcefully.⁴ However, data is noisy and signals can conflict, so I caution against an overly mechanistic reading.  This is why our March monetary policy statement emphasised “a data-dependent and meeting-by-meeting approach.”⁵

The data I am monitoring

Before discussing specific data, it’s important to note that the macroeconomic backdrop at the start of 2026 differs somewhat from early 2022. This matters when thinking about the shock’s potential impact.  Even before the invasion of Ukraine, inflation was 5 per cent by December 2021, reflecting supply bottlenecks, pent-up demand, and higher gas prices. Monetary policy was accommodative, with a deposit rate of minus 0.5 per cent, below even the low end of the neutral rate range. Time-based forward guidance on asset purchases, coupled with sequencing commitments on rates, limited our agility in responding to inflationary shocks. Indeed, this was another change in the 2025 ECB Monetary Policy Strategy Assessment, to avoid commitments that limit agility when states of the world change.⁶

Contrast this with now.  In February 2026, inflation was around our 2 per cent target and has been for much of the past year; the policy rate was within the neutral rate range – neither accommodative nor restrictive – and longer-term inflation expectations are well-anchored. Another important difference for second-round effects is that the labour market is in a different place than in early 2022.  Back then, strong post-pandemic labour demand pushed job openings to record highs. The labour market has cooled markedly since, with job openings returning to close to pre-pandemic levels for many countries (Chart 4).

If the central policy challenge is preventing the temporary from becoming persistent, the natural next question is: how will we know if that’s happening?

Let me highlight information I’ll be monitoring, grouped by direct, indirect, and second-round effects.

Direct effects

We need to monitor energy commodity prices closely. The war has disrupted the physical supply chain for energy significantly, including considerable infrastructure damage.  When delivery is more uncertain and shipping and insurance costs rise, this adds upward pressure on prices.  Oil freight rates have spiked sharply since the war started and remain exceptionally high with little sign of easing (Chart 5).

Gas storage levels in Europe are another important factor for supply-demand balance. Current storage levels at 28 per cent (24 March) are the lowest for this point in the year since 2022 (Chart 6). Reaching typical EU targets of 90 per cent storage by November could support higher gas prices through spring and summer, further amplifying geopolitical price pressures.

Downstream effects in retail energy prices are already showing up in home heating and transport fuel prices. The Eurostat flash estimate for March headline inflation released yesterday was 2.5 per cent. Unsurprisingly, a large part of the March inflation increase was energy prices, which increased sharply.  Core inflation – that is, excluding energy and food – came in at 2.3 per cent, marginally lower than the February reading of 2.4 per cent.  Services and goods annual inflation, at 3.2 per cent and 0.5 per cent respectively, are in-line with the path set out in the December projections. It is too early to expect to see indirect and second round effects in these items. Beyond headline and main category inflation rates, measures of dispersion and breadth of price changes in the HICP basket, such as the percentage of items with inflation rates above a certain threshold, will be watched closely as these can be a leading indicator of broadening price pressures.

Indirect effects

For indirect effects, producer price data indicates pipeline price pressures, but official series like the Producer Price Index (PPI) tend to lag.  For some industries, timely data on prices at different production stages – raw materials, intermediate goods, and final outputs – can provide early indications of future producer price dynamics.

Food production is one example, accounting for almost one-fifth of the average household’s spending. We know from 2022-23 that fertiliser prices feed into agricultural input costs with a short lag, usually three to six months, and show up in food commodity prices soon after.  Fertiliser prices rose sharply when Russia attacked Ukraine, taking over 18 months to return to pre-war levels. With high concentration of urea fertiliser production in Gulf states, including Iran itself, prices have increased sharply since the conflict started (Chart 7).

I already mentioned the cost of transporting oil as a direct effect I’m monitoring. But increases in fuel and transportation costs contribute to higher marginal costs for goods and services, another source of indirect price pressures.  ECB research suggests supply shocks hit goods prices faster but are more persistent for services prices.⁷ Diesel and jet fuel prices have risen sharply since the war in Iran started. In both cases, the current spike is not far off previous highs seen at the start of Russia’s invasion (Chart 8).

Second-round effects

For wage dynamics, I pay close attention to both the ECB’s Negotiated Wage Tracker and the Indeed Wage Tracker, developed jointly with colleagues here at the Central Bank of Ireland. The latter has higher frequency, broad coverage across sectors with and without collective bargaining agreements, and tends to lead official data on wage growth. I’m watching not just the level of wage growth but its acceleration relative to trend, particularly in domestic, non-tradeable sectors where energy cost pass-through is happening simultaneously. At this stage, it is too early to expect shifts in wage dynamics, as Chart 9 shows, but I will monitor developments closely to compare with expected wage growth in the March projections (Chart 10).⁸

For expectation formation, standard data sources – consumer surveys, market-based inflation break-evens, the Survey of Professional Forecasters, and the Survey of Market Analysts – will be important. But with one caveat: at times of high uncertainty, these sources can tend to confirm what has already happened rather than anticipate what is emerging. This means we need to watch higher-frequency price data more closely than usual.

Conclusion

Let me close by returning to the decision we took a couple of weeks ago and what it tells us about how policy makers are approaching this moment.

We held rates at 2 per cent because the outlook is genuinely uncertain.  But we are learning to live with uncertainty and to not be paralysed by it.  We have a framework for monitoring how the outlook evolves and a credible commitment to act when data clarifies the direction of travel.  And as I said, we are not pre-committing to a path and not ruling options in or out.  

The use of scenarios during exceptionally uncertain times is about ensuring we’re ready to respond in a timely manner as the situation develops. The path ahead is uncertain, but the commitment to price stability is not. 

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Source: Central Bank of Ireland

01 April 2026 Press Release

The Prohibition Notice (PDF) (PDF 4.09MB) issued after Mr Buckley signed a Statement of Undisputed Facts, in which he accepted that between 1 February 2021 and 12 December 2023, while he was employed at two different retail intermediaries, he issued invoices to clients directing payment to his personal bank account in place of his employers’ bank details.  Mr Buckley also accepted that he misrepresented his financial qualifications to clients during the course of his employment.

The Prohibition Notice issued to Mr Buckley prohibits him from carrying out any controlled functions for an indefinite period.

Karen O’ Leary, Director of Enforcement said:

“Controlled function holders must comply with the Fitness & Probity Standards and financial services legislation. Those in customer-facing roles bear a particular responsibility to act with integrity and honesty at all times, and a failure to do so risks eroding public trust and confidence in financial services. Where warranted, the Central Bank will investigate and seek to prohibit an individual from performing controlled functions in order to protect consumers from potential harm.” 

Additional Information

1. The Fitness and Probity Regime was introduced by the Central Bank under the Central Bank Reform Act 2010 to ensure that regulated firms and individuals who work in these firms are committed to high standards of competence, integrity and honesty and are held to account when they fall below these standards. View further detail on the Fitness and Probity Regime, including the Fitness and Probity Standards (PDF 330.71KB).
2. The Central Bank may investigate individuals in controlled functions, including pre-approval controlled functions, if we suspect that they do not have the required fitness and / or probity to perform the role, and we may prohibit them following such investigation, if appropriate.

Source: Central Bank of Ireland

31 March 2026 Speech

Good morning and welcome to Central Bank of Ireland. Thank you for joining us for this inaugural gathering of the Savings and Investment Forum.

I want to extend a particular welcome to the Tánaiste.

Today marks an important milestone.  The Department of Finance’s 2024 Funds Review recognised the importance of enabling more retail investment in Ireland.  It recommended establishing this Forum to address that challenge and today provides a timely opportunity to do so.

Let me place this initiative within a broader European context.

Last week I spoke about the fact that European households and institutions collectively held substantial savings.  In the euro area alone, the stock of deposits is nearing €10 trillion.  Yet investment has not kept pace with the growth in savings.  European Central Bank survey data shows that only a fraction of EU household wealth is held directly in capital markets instruments.  This matters because in order to fund the investments our European economies need – be that for innovation, infrastructure, or the digital and green transitions – we need strong capital markets to complement a strong banking sector in financing a more productive and competitive Europe.

The Savings and Investments Union agenda speaks directly to this challenge.  It recognises that unlocking retail participation in capital markets is not merely a financial services matter. It is central to Europe’s economic and financial resilience and the welfare of our people.

Ireland’s position within this narrative is distinctive.  Irish household wealth is heavily concentrated in housing, accounting for roughly two-thirds of total net wealth.  Where households do hold financial assets, these are indirectly in occupational pensions and life insurance and, most importantly, approximately €170 billion sit idle in deposits in Irish banks.

The result is that Irish retail participation in financial markets is very limited, even compared to our European peers.  As outlined in our research on retail investor participation, published at the end of last year, Irish households hold just 2.3% of their financial assets in direct investments such as listed equity and debt securities, compared to the EU average of 7.5%.  And Ireland has one of the lowest levels of direct holdings in investment funds in the EU at just above 2.2%, despite being an international financial hub and one of the largest global centres for investment funds, with over €5 trillion in assets under management domiciled here.

This low level of direct retail participation reflects a complex interplay of historical, cultural, and structural factors that have shaped how we think about savings and investment.  Yet our research shows that Irish consumers are motivated to invest. They recognise the importance of securing retirement income, providing for their children’s futures, and building long-term financial security.

However, significant barriers persist.  Psychological and emotional barriers are deeply rooted, perhaps in Ireland’s economic history and the financial crises we have experienced. There are knowledge and understanding gaps, including a perception that investment is complex, the preserve of the wealthy and a sense that the investment ecosystem does not serve the full spectrum of potential retail investors.

Given the complexity of the issue, no one intervention is enough and it probably requires multiple and sustained efforts from many stakeholders.

From my point of view there are three important ingredients to enhancing retail investor participation in Ireland: first, the availability of suitable products; second, that retail investors have the financial education, autonomy and advice to invest; and, third, that retail investors are protected when they do invest, with strong consumer protection frameworks and firms securing their interests.

I am heartened by the efforts of policymakers and regulators – domestically and in the rest of Europe – to progress and reinforce these ingredients.  The Central Bank supports efforts to reduce barriers to retail investment.  Products to encourage investment need to be flexible enough to allow product producers to design bespoke offerings that meet genuine consumer needs whilst maintaining sufficient standardisation to ensure comparability and reduce administrative burdens.

In my view such endeavours should be accompanied by sustained efforts to improve financial literacy and investment knowledge.  Consumers need to understand not only what they are investing in, but how any investment aligns with their financial goals, and what risks they are taking.  In short, I suggest it must be part of a broader effort to build financial literacy, foster a positive investment culture, and restore public trust and confidence in capital markets.

The Government’s National Financial Literacy Strategy, launched just over a year ago, recognises this challenge and commits to building the financial capability of Irish citizens. That strategy will be essential to the success of any initiative aimed at broadening retail participation.  Research has shown that financial literacy levels can play an important role in shaping household financial behaviour.  The Central Bank is committed to playing its part, including through our consumer protection framework and supervisory engagements.

This Forum is the right place to work through these considerations, bringing together policymakers, regulators, consumer advocates, and industry participants, all of whom have a role to play in contributing to this initiative.

We will play our role in supporting the Savings and Investments Union agenda, in line with our mission to ensure the financial system is operating in the best interests of consumers and the wider economy.  For me this means that the regulatory framework supports retail investment, that consumer protections are robust and that trust and confidence in capital markets are restored and sustained.  And, to that end, we are committed to working collaboratively with our colleagues at home and abroad.

I am sure today’s discussions will make a valuable contribution to the delivery of better outcomes for our citizens and our economy.

Thank you.

Source: Central Bank of Ireland

30 March 2026 Press Release

Central Bank of Ireland today launched a commemorative coin celebrating the life and work of renowned Irish playwright Seán O’Casey, on what would have been his 146^th birthday. It marks the 100th anniversary of the inaugural performance of his masterpiece The Plough and the Stars at the Abbey Theatre.

The silver proof coin will go on sale today (Monday 30 March 2026) at 1pm on collectorcoins.ie. Designed by PJ Lynch, there are just 3,000 coins available, and they will retail at €90.

Governor Gabriel Makhlouf presented the coin to Seán O’Casey’s daughter Shivaun during a launch at the Abbey Theatre attended by the O’Casey family and the current cast of the production, marking a fitting tribute to one of Ireland’s most significant dramatic works.

The premiere of The Plough and the Stars took place at the Abbey Theatre in 1926, less than ten years after the Easter Rising of 1916. Flawlessly weaving comedy with tragedy, the play tells the story of ordinary lives torn apart by the idealism of the time. This O’Casey masterpiece is a classic of human and political theatre which continues to resonate today.

Governor Gabriel Makhlouf said: “Seán O’Casey’s The Plough and the Stars remains one of the most powerful and enduring works in Irish theatre. A century on from its premiere, O’Casey’s unflinching portrayal of how political upheaval affects ordinary people continues to speak to audiences. This commemorative coin honours O’Casey’s artistic genius and the Central Bank is proud to mark this significant cultural anniversary.”

The Plough and the Stars is running in the Abbey Theatre until 30 April 2026 in an exciting new production directed by Tom Creed.

Pictures

Pictures of the coin attached. Robbie Reynolds Photography will syndicate pictures from the coin launch.

Further information

Elaine Scanlon – [email protected] 087 213 6313

ENDS

Notes to the Editor

Proof coins are collectable coins and are not intended for general circulation. They are minted using specially polished dies and blanks that give them a mirror-like finish.

Every year the Central Bank issues a number of collector coin products, on behalf of the Minister for Finance. The Collector Coin Advisory Group advises the Bank in relation to coin themes. The Central Bank invites public submissions in relation to themes.

Source: Central Bank of Ireland

27 March 2026 Press Release

The Central Bank Commission has appointed Elizabeth Mahon as Secretary of the Central Bank, effective 30 March.  Elizabeth has also been appointed to the role of Head of Governance in the Central Bank.

Elizabeth has more than 20 years’ experience in financial services, principally in the banking sector, where her career has focused on strategy and implementation, management consulting, organisational change, and stakeholder management. Since 2022 she has worked at the Central Bank as Head of Strategy & Foresight.

Neil Whoriskey, the current Secretary of the Central Bank, has been appointed as Head of Internal Audit. He has previously held a variety of leadership roles in the Central Bank including in the areas of governance, communications, strategy & planning and European co-ordination.

Announcing the appointment, Governor Gabriel Makhlouf said: “I am delighted to announce the appointment of Elizabeth Mahon to the role of Secretary of the Central Bank of Ireland and Head of Governance. The role of Secretary sits at the heart of our governance framework, ensuring that our decision-making processes are robust and to the highest standards. I would also like to thank Neil Whoriskey, who is stepping down after 15 years as Secretary, for his commitment and dedication.”

Source: Central Bank of Ireland

27 March 2026 Press Release

Governor Gabriel Makhlouf of the Central Bank of Ireland today emphasised the critical need to strengthen Europe’s Single Market as the foundation for mobilising the continent’s substantial savings in an increasingly fragmented global environment.

Speaking at Eurofi, Governor Makhlouf outlined his vision for connecting European savings with productive investment through economic growth and market integration.

“Mobilising Europe’s savings requires us to ensure that our economy is productive and innovative and operates as a genuine Single Market, creating the prosperity that generates capital, that supports the longer-term wellbeing of Europe’s citizens.” Governor Makhlouf said.

The Governor noted that euro area households currently hold nearly €10 trillion in deposits, with savings rates remaining above pre-COVID levels. However, a significant proportion of these savings continues to be invested outside the European Union.

“The question we should be asking is not simply how to redirect those flows, but why those returns are perceived to be higher outside Europe, and what we can do about it,” Governor Makhlouf said. “Fundamentally, it comes back to the performance of the real economy.”

Governor Makhlouf emphasised that whilst the Savings and Investments Union agenda is welcome and needed, financial market reforms alone cannot substitute for real economy performance. He called for:

• Strengthening Europe’s growth prospects
• Completing and deepening the Single Market, particularly in services
• Building more effective and integrated capital markets
• Maintaining the macroeconomic and institutional stability that is Europe’s hallmark

“The Single Market remains our most powerful and underutilised asset.  Thirty years after its creation, significant barriers remain, particularly in services.” the Governor noted. “Removing those barriers would not only boost productivity directly; it would also enable a step change in the development of Europe’s capital markets.”

The Governor also made an unambiguous call to policy makers to develop a European safe asset to anchor institutional capital and prevent European savings from being drawn towards alternatives outside the EU.

“In a more fragmented world, this matters more than ever,” Governor Makhlouf concluded. “By harnessing our Single Market alongside our international openness and leadership, we can ensure that Europe’s economic future is not only secure but strong.”

ENDS

Notes to Editors

Governor Makhlouf delivered his remarks to the Eurofi High Level Seminar online following the postponement of the in-person event in Nicosia.

Source: Central Bank of Ireland

27 March 2026 Warning Notice

Warning	Unauthorised Investment Firm / Investment Business Firm
Unauthorised Firm Name	Naperte Designated Activity Company (CLONE)
Website	https://napertedac.com
Email addresses used
Phone number used	+353 (0) 1 913 3003
Authorisation in Ireland	Naperte Designated Activity Company (CLONE) is not authorised to provide investment services in Ireland.
Additional Information	Naperte Designated Activity Company (CLONE) has cloned the name and details of a firm authorised by the Central Bank and has been seeking to pass itself off as the legitimate firm, Naperte Designated Activity Company (CBI00131514), in order to deceive consumers. There is no connection between the legitimate Central Bank authorised firm and this unauthorised clone entity.

Notes:

1. Any person wishing to contact the Central Bank with information regarding such firms / persons may telephone (01) 224 5800 or report an unauthorised firm directly to the Central Bank.
2. For more information on how to protect yourself from financial scams, please visit www.centralbank.ie/financialscams
3. The name of the above firm is published under section 53 of the Central Bank (Supervision and Enforcement) Act 2013. 

Source: Central Bank of Ireland

27 March 2026 Speech

Good morning and thank you for the invitation to join you.

Let me begin by acknowledging the difficult backdrop to my remarks today. The sad fact that this event has been forced online underscores the realities of the changed world we are in. Προς τους φίλους μου στην Κύπρο, λυπάμαι που δεν είμαι μαζί σας και ελπίζω να μπορέσω να έρθω σύντομα κοντά σας.

We are living through a period where the global environment is shifting economically, politically and institutionally. These shifts reinforce the need for the values, systems and structures that we have relied upon, indeed built our economic model upon: multilateral, shared rules, collaboratively designed and based on mutual respect and trust. While we may not have sought out the shifts, we need to recognise that they represent a new reality and, as European policymakers, we should double-down on our commitment to openness, to the rule of law, to stable institutions and to our values.

My main message today is that mobilising Europe’s savings requires us to ensure that our economy is productive and innovative and operates as a genuine Single Market, creating the prosperity that generates capital that supports the longer-term wellbeing of Europe’s citizens. To put it another way, don’t ask only what the Savings and Investments Union can do for you; ask what a genuinely barrier-free Single Market can do for Europe’s savings and investments.

In thinking about how we respond to this moment of economic and political shifts, I find it useful to consider the image of a bridge. A bridge connects by bringing places and peoples closer together, arguably the raison d’être of the European Union. In responding to our new, more fragmented, world, we need to think about the bridges that will help us to connect better. And the bridge I want to talk about today is bringing European economies closer together so that they and their financial systems are better connected to European citizens.

Europe today finds itself in a curious position: households and institutions collectively hold substantial savings. In the euro area alone, savings rates spiked during the pandemic and remain materially high at around 15 per cent, still in excess of pre-covid levels. This has meant that Europe’s total stock of household deposits is now nearing €10 trillion¹.

Yet investment, particularly through European capital markets has not kept pace with this increase. While only one-fifth of euro area household wealth is held in financial assets, we know that households in other countries allocate a significantly larger share of their wealth to market-based instruments.

Echoing the paradox of thrift: while saving is prudent for individuals, when considered at the macro level they can dampen demand and constrain growth if not channelled into investment.

Channelling a proportion of that stock and flow of savings into investment would go some way to helping the EU meet its investment needs, estimated at an additional €750-800 billion annually by 2030.

The savings and investment habits of Europeans reflect a range of considerations, some of them are structural, some are cultural, some align with economic incentives or risk appetites and others are about knowledge and understanding.  

You will be relieved to hear that I won’t address all of these today. But in considering how to mobilise savings to invest in European capital markets – or how to strengthen the bridge that brings savings and investments closer together – I want to start by focusing on a key fundamental, namely the economic growth that generates the savings that are needed by European capital markets.

Sustainable growth and deep and liquid markets enable capital to flow efficiently to investment. And with capital allocated productively, the economy can grow in a sustainable way.

The policy agenda to strengthen the bridge that we now call the Savings and Investments Union is welcome, needed and more important than ever. 

A more fragmented world

That is because we are operating in a global system that is becoming more fragmented.

Trade, technology and capital flows are increasingly shaped by geopolitical considerations. Supply chains are being reconfigured. Autonomy is becoming a policy objective across jurisdictions. Sometimes it can be strategic. And sometimes it can even be open. Either way, the rules-based system that has underpinned decades of economic integration is broken.

The resulting geoeconomic fragmentation, coupled with the pandemic and Russia’s war on Ukraine and its people comprise a trifecta of serious shocks to the European economy. The war on Iran has turned that into a quadruple. And perhaps we are seeing an emerging environment resembling Joseph Nye’s “Kindleberger Trap”, a world in which global leadership and coordination weaken, and with them the stability of the economic system.

Whether or not you accept that scenario, the direction of travel is clear: we are moving toward a world where European economic strength matters more than ever.

For us in Europe, it presents both a challenge and an opportunity.  

The challenge is that our growth performance is not as high as we would expect from an advanced economy of 450 million people accounting for over 14 per cent of global GDP. We are not achieving the potential of our underlying fundamentals.  

The opportunity is that we have a set of institutional strengths that are highly valued – and increasingly highly valued – in a fragmented world: predictability, stability and a deep commitment to the rule of law. The question, therefore, is not whether Europe has the resources to succeed. It is whether we are deploying them effectively. Mario Draghi and Enrico Letta have addressed that question.

Mobilising European savings: getting the foundations right

Which brings me to the core issue I want to focus on today, how to build the bridge that helps to ensure European capital works for Europeans.  We know that Europe has abundant savings. And yet a significant proportion of those savings continues to be invested outside the European Union. Why is that?

Growth prospects

At its core, the answer is straightforward: capital will always seek out the greatest potential returns. If European savings are flowing abroad, it reflects the fact that investors, whether households or institutions, expect higher risk-adjusted returns elsewhere.

So, the question we should be asking is not simply how to redirect those flows, but why those returns are perceived to be higher outside Europe, and what we can do about it.

Fundamentally, it comes back to the performance of the real economy. If European growth remains relatively weak, it limits the effectiveness of any financial or regulatory reforms aimed at deepening and integrating our capital markets.

This is the central message that runs through the Draghi and Letta reports: productivity and growth are the fundamental drivers of economic success.

Of course, growth does not exist in isolation. It depends on a stable macroeconomic framework: sound monetary policy delivering price stability, prudent fiscal policy, and sustainable debt dynamics. These are not optional. They are the foundations upon which everything else is built.

But beyond these fundamentals, we should focus on the structural conditions that support growth. And here, I think we need to be clear: the Single Market remains our most powerful, and underutilised asset.

Thirty years after its creation, significant barriers remain, particularly in services. Removing those barriers would not only boost productivity directly; it would also enable a step change in the development of Europe’s capital markets.

Market depth and liquidity

The fact is that European capital markets remain less deep and less liquid than their counterparts elsewhere. This is both a cause and a consequence of capital outflows.

Liquidity attracts liquidity. Large investors are reluctant to commit to markets where exit is uncertain. This keeps volumes low, which in turn keeps liquidity thin. Breaking this equilibrium requires scale.

It requires a critical mass of issuance, including the development of a European safe asset. European policy makers need to give serious consideration to whether now is the right time to pursue a European safe asset, one which could anchor institutional capital. In my view the answer is an unambiguous ‘yes’. It would be a significant step forward, and an important counter to European savings and capital being drawn towards alternatives.

Our capital markets also require stronger retail participation, including – I suggest – through pension reform. And it requires continued efforts to reduce fragmentation within markets. I mention this not for the sake of the financial services industry but because of the benefits that participation in capital markets can bring to the real economy and to individual households.

The Savings and Investments Union has the potential to improve market functioning, simplify the regulatory framework, and support innovation. But we should also be clear about its limits.

Financial market reforms cannot substitute for real economy performance. Nor should debates about supervisory structures distract us from higher-priority objectives. Improving convergence in supervision matters but it is not the defining feature of a successful capital market.

What matters more are deep and liquid markets, supported by strong economic growth and a large supply of high-quality assets. These elements would improve the bridge between savings and productive investment both for the individual European citizen and the European community as a whole.

The role of central banks and regulators

So where do central banks and regulators fit into this picture?

Our role is not to deliver productivity growth or remove barriers in the Single Market. But we are responsible for anchoring the conditions that make growth and investment possible.

First and foremost, that means delivering on our mandate of price stability despite the geoeconomic environment becoming increasingly more volatile.

Stable and predictable prices are essential for long-term investment decisions. Without them, uncertainty increases, risk premia rise, and capital allocation becomes less efficient.

Second, we have a responsibility for financial stability.

A stable financial system is a precondition for effective capital allocation. It protects consumers, supports confidence, reduces risk, and enables investment.

At the Central Bank of Ireland, our priorities reflect these realities. Our recently published Regulatory and Supervisory Outlook report emphasises the importance of resilience across institutions, markets and the system as a whole.  It highlights the need to protect consumers and investors. And it recognises the growing importance of innovation and technological change.

We are also focused on ensuring that our regulatory framework is effective and efficient and have published a roadmap on how we intend to ensure we regulate and supervise well, supporting better outcomes and effective resilience.  

Conclusion

Let me conclude. Europe does not lack savings, and it certainly does not lack potential. But we need to work collectively to enable the conditions – namely growth, market depth and scale – required to retain and deploy those savings within European capital markets.

In a more fragmented world, this matters more than ever. Because capital will increasingly flow to those economies that offer not only stability, but also opportunity.

The task before us is therefore clear:

• Strengthen our growth prospects
• Complete and deepen our Single Market
• Build more effective and integrated capital markets
• And maintain the macroeconomic and institutional stability that is Europe’s hallmark

Oscar Wilde once put it well, “the truth is rarely pure and never simple”. And the way forward is neither easy nor simple.

But, if we do these things, European savings will not need to be persuaded to stay. They will remain because the opportunities are here, because we have built the bridge – one of Robert Schuman’s réalisations concrètes – to connect savings with productive investments.

And although building bridges isn’t a straightforward task, we Europeans have a history of doing it well, from the Arkadiko Bridge in Greece and the Ponte Vecchio in Florence to the Viaduc de Millau in France and the Øresundbron between Denmark and Sweden and many others.  

By harnessing our Single Market alongside our international openness, outlook and leadership and by building a Savings to Investments Bridge, we can ensure that Europe’s economic future is not only secure but strong.

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Thank you to Seán O’Sullivan, Cian O’Laoide, Caroline Mehigan and Vasileios Madouros for their input into these remarks.

[1] https://data.ecb.europa.eu/key-figures/money-credit-and-banking/bank-balance-sheets/deposits?tab=Households&indicator=Deposits%2C+total+-+stocks

Source: Central Bank of Ireland

27 March 2026 Warning Notice

Warning	Unauthorised Irish Collective Asset-Management Vehicle (ICAV)
Unauthorised Firm Names	TD ICAV (CLONES)
Websites	https://www.tdicav.org www.tdicav.com
Authorisation in Ireland	These Clone Firms are using the name TD ICAV and are not authorised to provide investment services or any other financial services in Ireland.
Additional Information	These scam firms cloned the name of a fund authorised by the Central Bank and has been seeking to pass themselves off as the legitimate fund, TD ICAV CBI00417775, in order to deceive consumers. It should be noted that there is no connection whatsoever between the Central Bank authorised fund and these scam entities.

Notes:

1. Any person wishing to contact the Central Bank with information regarding such firms / persons may telephone (01) 224 5800 or report an unauthorised firm directly to the Central Bank.
2. For more information on how to protect yourself from financial scams, please visit www.centralbank.ie/financialscams
3. The name of the above firm is published under section 53 of the Central Bank (Supervision and Enforcement) Act 2013.

Source: Central Bank of Ireland

27 March 2026 Warning Notice

Warning	Unauthorised Investment Firm / Investment Business Firm
Unauthorised Firm Name	Castleforbes Wealth (CLONE)
Website	www.castleforbeswealth.com
Email addresses used
Phone number used	+353 1 526 6602
Authorisation in Ireland	Castleforbes Wealth (CLONE), operating the website address, www.castleforbeswealth.com ,is not authorised to operate as an investment business firm or investment firm in Ireland. This scam firm has cloned the name address and CRO number of a dissolved Irish company, in order to deceive consumers. It should be noted that there is no connection whatsoever between the CRO dissolved entity and this fraudulent entity.

Notes:

1. Any person wishing to contact the Central Bank with information regarding such firms / persons may telephone (01) 224 5800 or report an unauthorised firm directly to the Central Bank.
2. For more information on how to protect yourself from financial scams, please visit www.centralbank.ie/financialscams
3. The name of the above firm is published under section 53 of the Central Bank (Supervision and Enforcement) Act 2013.