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THE CENTRAL BANK of Ireland today released the first Financial Stability Review (FSR) of 2022 which has shown how the war in Ukraine has put pressure on financial markets around the world, including our own.
The FSR outlines key risks facing the financial system and the Central Bank’s assessment of the resilience of the economy and financial system to adverse shocks.
The review found that following a rapid economic recovery from the pandemic, Russia’s invasion of Ukraine has led to “lower global growth expectations and intensified inflationary pressures”.
The stability review showed that price pressures coupled with a tight labour market point to emerging pressures in certain sectors, including the housing market.
Governor of the Central Bank, Gabriel Makhlouf, said the latest review comes following a series of shocks to the economy in sequence.
He said: “The invasion of Ukraine by Russia is first and foremost a human and societal tragedy for the people of Ukraine. This horrific war has amplified many risks around the world, and inflation is now running at the highest levels seen in four decades in many developed economies, including here in Ireland.”
He explained: “It is this inflationary environment – and the range of unprecedented and unexpected shocks to have hit the global economy in recent years – which forms the key backdrop to our risk assessment in June 2022.
The world is now a more uncertain place than it was only six months ago. In this context, forward-looking judgements around the evolution of the macro-financial environment are particularly challenging.
On the resilience of the Irish economy itself, Governor Makhlouf said households and businesses in Ireland continue to have important capacity to cope with these risks and are in a better position to absorb shocks when compared to the onset of the post-2008 crisis.
In relation to the resilience of the banking sector, the Governor added that retail banks are in a position to absorb negative shocks without adverse knock-on implications for consumers or the economy.
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Covid was the old excuse. The war is the new excuse.
@James Fox: imagine a world wide pandemic that shut down supply lines impacting economies, and now a war in Europe doing the same and driving inflation.
@Stephen Kearon: now imagine the ECB inflating the money supply by 2 trillion in two years and blaming it on a war thats been happening for less than 5 months
@James Fox: and before that it was Brexit … always an excuse
@Ivor McTin: 100% right. Nothing about all the money that’s been printed and feeding the stock exchange for the last few years. QE is always followed by inflation.
How much did the authors of this report get paid and how can I get a job there? I’m extremely well qualified with a unique ability to see the wood from the trees.
@Nomad: you won’t be seeing much wood coming from Russia…
Childcare costs, insurance costs, price gouging, extortionate house prices might also be a factor.
@Leo’s Spin Department: and all this was going on before covid and the war.
The ECB monetary policy is the main driver of inflation. Of course, you’ll never see any criticism of EU or the ECB on Irish publishers.
It’s alright , Eamon says go down to the dole office and ask for help.
This is happening the world over, not just Ireland. So why the click bait heading? As someone else also wrote, “No excrement Sherlock…”. The World Bank said the same thing some weeks ago and that was as incredible as the central bank analysis!
The impact of the Ukrainian war on the world economies is as evident as the sun rising and ice being cold…tell us something new, like how to address or cope with it? Silly that even a penny was wasted to do a study that any man in the street knows the answer to!
No excrement Sherlock…
Wow and it took a finiacial stabilty report to figure that one out .!!!
Its not the Ukrainian war, its plundering of the sovereign country mass killings, destroyed cities .Actually ,every news should address it with Putins Russia invasion.
Tell us something we do not know….. like what they will do to restrict the pressure this spike in inflation is doing to the people they work for…..that’s us btw
Ehhhh…. Duh!
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