The Governor of the Central Bank, Gabriel Makhlouf, has sent a strong message to insurance companies involved in disputes with customers over business disruption policies. 

Speaking remotely to the European Financial Forum, organised by the Financial Times in partnership with IDA Ireland, the Governor said studies published by the bank had made clear "cases where valid cover exists."    

"The UK courts have been clear with you. And now the Irish courts have been clear with you. Any continuing failure to do the right thing by your customers is inexcusable and we won't hesitate to take action accordingly," Gabriel Makhlouf added. 

Last week, the High Court ruled in favour of several pubs which had taken a test case out against insurer FBD over their business disruption cover.  

In his speech today, the Governor also said he believed the outlook for the global economy has deteriorated in the near term. 

He said two thirds of OECD economies have tightened their pandemic restrictions since December. 

The measures have triggered an enormous economic shock, particularly on consumer spending, he said. 

We are experiencing "the largest peacetime global contraction since the Great Depression," he added. 

The Central Bank boss said that in Ireland, as elsewhere, the full transmission of the shock to the economy and the financial system will take time. 

He said the bank's forecasts for growth this year are still contingent on what happens with Covid-19.  

The loss-absorbing capacity of the banking system is not without limits and no one can afford to be complacent, he cautioned but he said the financial system has proven resilient.  

He also said that now is not the time to withdraw either fiscal or monetary support.