Mr. Mark Cassidy:

A number of questions related to the nature of the new trade deal and the impact it may have on tariffs and particular sectors. It is reasonably fair to say that in terms of trade arrangements, it would suit all parties in the negotiations to have reasonably free trade arrangements. The effects of that would certainly be much more benign for Ireland, the UK and Europe in terms of trade and investment links. Of course, this does not mean that this will be the eventual outcome. I think this depends on the other factors in an overall comprehensive deal so we cannot rule out the possibility that the outcome will be the more unfavourable one of trading goods reverting to WTO arrangements. In the more benign scenario, we would have either no tariffs or relatively low tariffs on trade between Ireland and the UK. In that case, many of the effects would come through the impact on the exchange rate - I will come back to the permanence of that in a moment - and the fact that the economic outlook for the UK might be slightly lower over the short and medium term than it would be otherwise. Those effects would be much more short term and limited for Irish exports so while I am not ruling out the fact that some sectors may be affected, the economic impact of a free trade arrangement or close to free trade arrangements would be much more benign.

In respect of the more unfavourable situation whereby trade in goods reverts to WTO conditions, we refer to no tariffs on services possibly because the WTO covers goods. It is much more difficult for some reasons that have been mentioned to impose tariffs on services but over time, the regulatory requirements for services can differ across countries which can impose the main restrictions on trade in services, very notably in the financial sector. In terms of trade in goods, a very useful and granular ESRI analysis looks at what sectors and countries could be most affected. It is important to know that the impact on a particular country does not just depend on how much of our trade goes to the UK but the sectoral composition of that trade. Some notable facts in this regard include the fact that tariffs on agricultural and clothing products, particularly agricultural products, are at the highest end of the range. This is largely because trade in goods under the WTO rules tends to be trade as a percentage of the value but, very significantly, trade as a percentage of the weight of the good. Often these goods are among the weightier goods traded. Ireland would fare unfavourably because of our sectoral composition of the goods. In fact, the ESRI analysis suggest that the average tariff on Irish exports could be between 10% and 18%. That compares with the European average of closer to 6% so we are talking about significant effects in addition to the other effects that might arise because of the exchange rate and any downturn in the UK economy. Clearly, while a number of sectors, including tourism and computer services, would be significantly affected, those most affected would include those where the tariffs are also particularly high in addition to the other effects.

With regard to the exchange rate effect, it is fair to say that the value of the exchange rate that currently pertains reflects the expectations in the market regarding what a future trade deal might look like. If the adverse scenario materialises, a further weakening of sterling compared to the euro may be expected. One does not like to predict exchange rates too far into the future but some weaker level into the future may be expected. If more favourable outcomes materialise, some closing of the change that has already occurred may be expected. With regard to exchange rates, economies tend to adjust to those changes over time. It does not mean that there will no short-term effects. Services will also be affected by the exchange rate. For example, the tourism sector would be mainly affected by the exchange rate without tariffs on goods. Over the longer term, tariffs might be the more important effect.

I am afraid we are not privy to the type of special deals that may be available. Those more directly involved in the negotiations over the next two years would be better able to answer those questions in terms of whether special deals in terms of transition arrangements reflecting Ireland's closer trading links with the UK could be put in place but it is certainly very welcome to hear European and UK representatives highlight the importance of the Irish trade and economic links with the UK.

In respect of issues and authorisations, I cannot really add to what Ms McMunn has said. There have been many initiatives within the banks in terms of our engagement with firms, the numbers involved and ensuring we have the appropriate skills. I am not aware if the mandates of central banks elsewhere contained or have contained the requirement to promote the financial services industry. What other banks are doing on the ground is very difficult to ascertain and we are not familiar with that. The supervisory and authorisation activities that have taken place in the Central Bank have been highlighted by Ms McMunn. Of courses, we are interested in other policies. We have a role in terms of providing our views publicly in respect of macro-economic stability and the importance of maintaining stable public finances to protect ourselves against any economic shocks that may be coming down the line. Ensuring we can maintain flexibility for any additional public expenditure requirements that come down the line is particularly important. We must also be aware of the potential shocks to the economy either via international financial markets or any volatility that may emerge in residential or commercial property markets. In that regard, we have an important financial stability mandate and in terms of policy measures taken, have developed a comprehensive macro-prudential policy framework to reduce the risks of cyclical financial shocks occurring and to protect or enhance the resilience of the economy and financial sector against any shocks that may come down the line, including but not restricted to those related to Brexit. I am not sure whether Dr. Fagan has anything to add.