Sharon Donnery: Banking – past, present and future

Remarks by Ms Sharon Donnery, Deputy Governor of the Central Bank of Ireland, at the Banking and Payments Federation Ireland, Dublin, 31 July 2024.

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

As the Single Supervisory Mechanism (SSM) of the European Central Bank (ECB) celebrates ten years of centrally supervising European Banks, reflections on the retail banking system in Ireland, progress made and threats and opportunities ahead.

Good afternoon, I am delighted to be here. Many thanks to Brian and the BPFI for hosting me, and I look forward to the discussion.

In my remarks today I wanted to outline some thoughts on the banking sector in Ireland and Europe – in the context of a rapidly changing and digitising world, and indeed financial system.

As the ECB celebrates ten years of the SSM and centralised supervision of the largest banks in Europe,  I want to look back at how we have dealt with the challenges of the past – before looking forward to how we must prepare for the challenges of the future.

First comes first though – why do Banks, and indeed the health of Banks, matter?

A well-functioning financial system is vital for consumers, businesses and the economy.

In Ireland and Europe banks are a key part of that financial system. By allocating credit, safeguarding people's money and facilitating their transactions the sector performs an important function for our society.

When it goes right, banks contribute to economic growth – increasing living standards – and bring benefits to individuals and the country.

But we have also all seen what happens when it goes wrong – when credit allocation becomes a bubble, or a crunch, when people fear for the safety of their money, or when systems fail and transactions don't transact. 

Clearly, a well-functioning financial system relies on well-functioning banks. And this is why the health of the banking sector is so important – so that it can sustainably perform its function for society, through good times and bad.

Where we have come from

Ensuring the resilience of the banking system has been a key focus for most of my career.