Ms Mairead McGuinness:

I thank Deputy Calleary very much. He made five points. I will try to answer them in the order in which he raised them.

With regard to the issue of Article 16, the invitation from the committee to be here was sent last December. We had difficulty finding time. On the Deputy's specific point on what happened and ensuring that it will not happen again, I have been very public about what happened. It certainly will not happen again. The Deputy should acknowledge the words of the President of the European Commission, Dr. Ursula von der Leyen, her apology and her commitment to Northern Ireland and to the full implementation of the protocol. The idea that this would have consequences was accurate at the time but we should not allow the past to blur the situation today or to be used inappropriately by those who might have other ideas as to what should happen in implementing the protocol on Northern Ireland. The Deputy asked me a direct question. I can give him absolute guarantees with regard to the system in place. There is now an onerous system regarding issues relating to Northern Ireland and Ireland. There are many issues that will impact on Northern Ireland in our normal day's work. We in the Cabinet are very focused on that.

I wish the United Kingdom would apologise for its unilateral action. We have never seen such an apology. There should be an acknowledgement that the President of the European Commission and my colleague, Vice President Maroš Šefovi, whom the Deputy knows very well, reached out to Northern Ireland and gave an abject apology in the week after the Article 16 issue arose. That should be accepted for what it is. I can give the Deputy guarantees that this will not happen again. I am sure that, in politics, all of us have seen things happen that should not have but, if people are big enough to apologise and if that apology is accepted, we should move on, wiser to what happened and making sure that it does not recur in the future. I am a little worried that our UK friends bring this up all the time. I do not believe we should help them in their case because they can do that quite strongly themselves. It is inappropriate at this stage. This is now the month of July. Brexit happened on 1 January. Article 16 was not triggered but there was an interim of a few hours before that was clarified. We have learned from that, as we all should when errors are made. I again hope that we will not ignite a fire that should not exist and allow others to use, in a very inappropriate way, a mistake that was made, acknowledged and apologised for.

To move on to the area of financial services, it may be useful to say that financial services do not form part of the trade agreement, as colleagues will be aware. There is no formal negotiation around financial services. What we did before 1 January was to grant equivalence in a small number of areas where doing so was in our interest. That is what equivalence is. It is interesting that, just before 1 January, the United Kingdom granted equivalence on 28 areas of the financial system, although not to the European Union but to the EEA. That is significant. I am not sure how the Deputy would read that. The Deputy asked me about what is happening in respect of the negotiations. There are no negotiations on financial services. What we are doing, and the UK has done likewise, is making sure that the financial system that Europe relies on post Brexit is stable. We are looking to see where our interests will lie in the future. We have agreed a technical memorandum as to how we will work with the United Kingdom. These are technical discussions. We have the same sorts of agreements with the US and they work really well. It is a forum where we can discuss regulatory issues because there will be common issues which we need to discuss.

With regard to equivalence, we have granted equivalence to the one area of these central counterparties, CCPs, in the London system which Europe relies on until June of next year. We are now looking at what will happen for the future. We have made no final decision on that but we will be looking at it from the point of view of what is in the best interests of the financial stability of the European Union. When we get down to having regular engagement with the United Kingdom, as we do with the US, there will be global issues on which we will have to have conversations. These may include digitalisation or other parts of the system which are changing. I hope we get to that stage. We do not have any poker cards. The situation is not quite the same as that which obtained during the trade negotiations because it has been very clear from the outset that finance was not part of the conversation.

For the European Union, this means that there will not be one main financial centre. London was the main financial centre for the European Union but it is now outside the Union. From my experience, I have come to the view that we will see different centres emerge for different services. Whether in Frankfurt, Dublin or Amsterdam, we will see these developing. There are opportunities in this area for many member states. Up until Brexit, it was very appropriate to have a central place like London. Covid has shown us that it is not always necessary to have one location. We now know that people can work from all sorts of places once the technology exists. I cannot stress enough that the role I play here in the college is to make sure that the financial system is stable and that we can weather not only the good weather, but the bad days. As I look out my window here in Brussels, it is pretty grim and pretty grey with heavy rain. On the financial side, that is the objective. There are no specific timelines or deadlines we have to do things by. I am listening to the comments of the chancellor and others in the financial system. They believe they can continue to serve us with a lot of the infrastructure. We have to see whether that is in our interests. I am sure the UK is taking the same view.

With regard to the Deputy's questions on banks, I will refer first to the broad question of climate risks and the financial system. Climate risks will cause financial instability if they are not addressed. That is a fact. We see that from all of the regulators. We know that this will be the case. It speaks very much to the Deputy's point. You can have an investment portfolio of buildings which might be subject to flooding or which might be just wiped out, as we saw on the Continent. Your balance sheet will be fairly skewed if this happens to a significant degree. I draw the Deputy's attention to a strategy, which I can share with the Cathaoirleach, that we launched just last week. It relates to financing the transition. One of the four pillars relates to the resilience of the financial system. The Deputy asked me if the financial system is aware of all of this or whether greenwashing is taking place. I have been here for approximately nine months and it is very clear to me that the financial system gets it now. Those involved understand that climate change is a risk for them and for their bottom lines, and that they have to act. When you hear the big asset managers who have not traditionally supported climate action and so on speaking to both their boards and their shareholders about what they need to do for the future and see them seeking to invest in sustainability, it is clear that they get the message. They can see that the consequences for their bottom lines will be really severe. We have asked the supervisory authorities here to look at the regulatory implications of taking climate into account, which we have to do.

The ECB is also looking at this. It may speak to the point I made in my opening remarks that business used to divide itself from health in the sense that one never thought the other would impact on it in the way it has. Business now realises that nature hits it and it hits nature. There is what we call in Europe a double materiality concept. In terms of sustainability, we are making sure that corporate entities report on their impact on climate and the impact of climate change on them, and that the financial system reports on what it is doing around sustainable investments.

We are trying very hard to avoid the disaster that would be greenwashing. We have had a good bit of it up to now because there are many, but no clear, standards. We have issued a directive on corporate sustainability reporting. When that is in place, it will give clarity to the corporate world and the financial system.

The only way to avoid any sort of washing, in particular greenwashing, is to check. We will insist on assurances. Those who carry out audits and those involved in sustainability reporting will have to give assurances to the system that what they are saying is what they are actually doing. If they do not do what they are saying, penalties will apply. We are using a carrot-and-stick approach. We are making sure there is transparency so that investors, whether small or large, know what they are investing in and their investment requirements as individuals or pension funds are met because they have access to this information. The point the Deputy raised is very important.

As to the specifics around mica and pyrite, it is on my radar because I represented the areas that are impacted by this. Our hearts would go out to people whose homes are crumbling. It has not been brought to my attention in terms of the financial system, but following the intervention of the Deputy, I will make an inquiry and perhaps reply to him separately around that. He can bring it to the attention of colleagues.

We are awake to the impacts of climate change. The financial system is now on board and it is our duty to make sure it stays on board. We also need to stop investing in what is not sustainable. That is perhaps another part of our conversation. It may arise later.