Reflections on Building Resilience and Anchoring Stability

This week saw the publication of two reports: our latest Regulatory & Supervisory Outlook (RSO) as well as our first quarterly Access to Cash report. Next week we plan to publish a discussion paper on distributed ledger technology and tokenisation. All these publications are essentially about the changes we are witnessing in the economy in general and the financial sector in particular. They also reflect our determination not only to understand evolving economic and financial conditions, but to respond in ways that strengthen resilience, safeguard stability, and support the public interest.

At the heart of our current focus is a clear message, that building economic resilience is not optional but rather a prerequisite for sustained prosperity for Ireland’s financial system, and for households and firms navigating a rapidly shifting global landscape.

Responding to Change, Strengthening Resilience

In my recent letter to the Tánaiste (PDF 3.24MB) and Minister for Finance, I set out my views on the macro-financial landscape and the actions needed to reinforce our economic resilience. Recent developments on the global stage have highlighted the significance of geopolitical tensions alongside the scale of technological change which faces the economy and the financial sector. Indeed, it underlines the need to strengthen our economic resilience and adapt strategically over the medium and long term.

The Irish economy has shown remarkable adaptability in recent years. Yet enduring resilience requires more than a strong starting point; it requires proactive attention to structural weaknesses and the fostering of sustained economic strength. In outlining our priorities, my letter emphasised a set of interconnected policy areas critical for resilience:

• Growing supply-side capacity, especially through the delivery of necessary infrastructure that underpins sustainable growth, from housing and transport to energy and water.
• Strengthening the indigenous business sector to complement foreign direct investment and diversify the economy’s base.
• Building fiscal buffers and prudent expenditure control to create fiscal space for vital investment.
• Supporting household resilience by enhancing participation in financial markets and reducing barriers to financing for firms and households alike.
• Collaborating with the EU and beyond to develop trade and multilateral frameworks that deliver stability and certainty.

These priorities are not abstract. They speak to the practical steps necessary to expand resilience from the economic fundamentals through to the institutions and frameworks that support a dynamic yet stable economy. The RSO itself sets out in greater detail our perspective on the key trends and risks that are shaping the financial sector’s operating landscape, and our regulatory and supervisory priorities for the year ahead.

Access to Cash: Safeguarding a Foundational Service

Our Access to Cash report marks a significant milestone in our responsibilities to ensure that cash remains available and accessible. As payment habits evolve, it remains important that changes to cash infrastructure do not outpace society’s needs, including those for whom digital alternatives may not be suitable or reliable. Maintaining appropriate access to cash is part of building a resilient financial system.

The data we published this week shows that Ireland’s cash infrastructure (as at the end of last year) encompassed over 4000 ATMs and more than 1200 cash service points.

Where shortfalls exist (against criteria set by the Minister for Finance), they are minor and have been communicated to the banks to ensure they can begin to put in place plans to address them. This work is part of our broader engagement with the public on how best to implement access-to-cash provisions, including the publication of consultations on local deficiencies in cash infrastructure and minimum service standards for ATM operators.

Independence: An Anchor for Stability

While economic and financial resilience are central themes in our practical work at the Central Bank, what underpins that work is our statutory mandate. This was the focus of my keynote address at the Blavatnik School of Government at the University of Oxford last week, where I spoke about the role of central banks as institutions and, in particular, about the concept of independence.

Central bank independence is often misunderstood as a shield from external pressures. In reality, it serves as an anchor, a framework that allows monetary and financial policy decisions to be made in the long-term interests of the economy and society, free from shorter-term political cycles. But independence is neither automatic nor self-sustaining. It must be continuously earned through credibility, competence, engagement, and a demonstrable commitment to the public good.

I emphasised that credibility, often cited as central banks’ most valuable asset, rests not just on legal mandates, but on engagement with society, accountability mechanisms, and transparent communication. Independence does not mean isolation; it means an ongoing dialogue with elected institutions, civil society, and the wider community. As we seek to maintain price stability and support financial stability, this institutional credibility anchors confidence and supports well-functioning markets and economic systems.

This year’s work programme

The work of the Central Bank continues against a backdrop of change that is both rapid and complex. Our recent publications and speeches reflect a clear recognition of this, and a commitment to policy frameworks that are resilient, credible, and responsive to evolving economic realities.

Maintaining access to cash remains a practical priority within the payments landscape; building economic resilience is a strategic imperative; and safeguarding the principles that underpin central bank independence is essential for delivering on our statutory mandate and for the broader economic welfare of the people we serve.

Over the course of rest of the year, we will continue to engage with the public, and indeed the Government as it prepares to host the EU presidency. In all of this work, our aim remains consistent: to support a stable, resilient and inclusive economy that delivers sustainable prosperity for Ireland.

Gabriel Makhlouf