*** Taken together, the fundamental structural characteristics of the Irish economy imply many vulnerabilities. The openness, heightened volatility, the role of multinationals, pharma and computer services driven export growth, and simply being small. These factors point to the economy, the public finances, businesses and households being more exposed to macroeconomic risk than larger economies.
This means that the domestic banking system is– at all points in the cycle – exposed to greater macroeconomic risk than banking systems in larger, more diversified economies.