The Irish macrofinancial environment has been more volatile than its European peers in the past. Cross-country volatility of a range of macrofinancial variables since 1980 – including house prices, GDP, household income, employment, and credit, for example – illustrates this.4 In summary, there are big benefits for Ireland being a highly globalised economy. But these benefits also bring risks.
Double gearing results in the overstatement of capital and can also lead to regulatory arbitrage. •  Another aspect which is often difficult to detect is of intra group transactions, which might not be on arms-length basis. This increases the likelihood of fraud or siphoning-off of funds. •  Liquidity risk arising from asset liability mismatch is also of great significance.