The low interest rate environment that has persisted in recent years has generated a positive financial terms of trade shock for debtors. In the other direction, any upward shifts in policy rates, term premia or risk premia will pose adjustment challenges for indebted sectors and may have a material impact on asset valuations.
Finally, disorderly versions of Brexit would disproportionately affect Ireland relative to other European economies. As the EU-UK negotiations proceed, scenarios in which trading frictions between the EU and UK are increased would be damaging for the productivity of the Irish economy. 1/5  BIS central bankers' speeches  Macro-financial risk management: policy issues There are two basic elements in macro-financial risk management.