Dr. Conor O'Toole:

I agree with the broad assessment that Irish households and firms and the banking sector are not particularly exposed to Russia and, therefore, the direct financial stability risks in Ireland are not especially high. There are countries in Europe whose banking sectors have exposures, such as Austria, Italy and France. Those countries are more exposed to defaults not only by the Russian state but by banks in Russia with which they have exposures. There is always the possibility of contagion from financial stability mechanisms propagating through the system. The banking sector in particular is a lot stronger now than it was at the start of the financial crisis. The European banks are very well capitalised. The funding structures for European banks are much more stable than they were back in the global financial sector period. The vulnerabilities that materialised in the financial crisis are not necessarily the same now. The risks are lower but, with such a significant shock as the war in Ukraine that has such large consequences for the international financial sector, it is difficult to know at this stage where all the effects are going to wash through.