The CCyB safeguards against cyclical risk by adding to capital requirements during positive phases, in order that credit supply can be preserved during downturns by corresponding subtractions in capital requirements. However, the CCyB does not address tail systemic risks that are orthogonal to the domestic macro-financial cycle.
As discussed above, the primary systemic risk facing Ireland is its high dependence on multinational firms (leaving aside Brexit risk). If there were a persistent shock to this sector, the cumulative decline in economic activity would dwarf a normal cyclical recession, with attendant implications for the financial system.