Risks to Ireland's financial system from the global environment have intensified, Central Bank of Ireland has said today.The Financial Stability Review, published today, assesses the risks to and resilience of the Irish financial system. A persistent global energy supply shock triggered by the conflict in the Middle East, the risk of a correction in financial markets, potentially amplified by financial vulnerabilities in parts of the global non-bank sector, and increasing cyber risks could create challenges for Ireland. If the conflict persists for longer than expected, there is the potential for more than one vulnerability to be triggered at the same time.Today’s review emphasises that Ireland's financial system is starting from a position of strength, but that resilience must be protected. The conflict in the Middle East has disrupted global energy supplies. If it intensifies or continues for longer, it will push up inflation, slow economic growth and increase costs for Irish households and businesses. Ireland's dependence on imported energy and international trade means the country is particularly exposed to these global developments. Valuations in the artificial intelligence sector have reached high levels, with an increasing amount of investment in the sector funded by debt. Any reassessment of the sector could have wider economic effects. Growing use of private credit markets to fund AI and tech companies creates additional risks. Cyber risks are also increasing with heightened geopolitical tensions and rapid developments in AI capabilities.  The evolving cybersecurity landscape requires continued strengthening of operational resilience capabilities by the financial system.The Government’s finances remain strong, but there are underlying vulnerabilities. Budget surpluses depend on corporation tax revenues. Without these receipts, the budget balance is projected to remain in deficit, leaving the State exposed if the global economy weakens or multinational activity is affected. Commenting on the publication, Governor Gabriel Makhlouf said: "Ireland's financial system and economy have shown remarkable resilience through multiple crises in recent years. However, the world is in an extraordinary period of change. While we start from a strong position, today’s report shows Ireland faces intensified risks from the global environment. These include the energy shock, high valuations vulnerable to adjustment, and cyber and AI threats. “A sustained energy shock could intensify cost pressures for businesses and households. While the domestic economy is expected to continue growing, this will be modest growth, and it will have less room to absorb shocks. “This is why preserving resilience is so critical right now. Strong capital buffers in our banks, prudent lending standards, and robust operational defences are essential to ensure the financial system continues to serve households and businesses. In an environment where growing global debt has reduced many countries' capacity to respond to shocks, prudent fiscal management is more important than ever.”  ENDSFurther informationMartin Grant: martin.grant@centralbank.ie / + 353 86 078 7868Media Relations: media@centralbank.ie Notes to EditorView the Governor’s opening remarks.View the Financial Stability Review, May 2026 report.

1We are at the early stages of a potential technological rewiring of finance. Fast-forward ten or twenty years, and it seems likely that the use of shared, programmable ledgers – and the tokenisation of financial assets – will have become embedded across the financial system. Today, we stand at a juncture. The question is less whether the technology will transform finance. Rather, it is how we collectively shape this ongoing transition, so that the potential of tokenised finance is realised, from the perspective of households, businesses and the broader economy. Central banks are not just observers of this evolution, but active participants, providing many of the enabling foundations for the private sector to innovate responsibly. So today I want to outline how the Central Bank of Ireland is approaching the emergence of tokenised finance.  The transformative potential of tokenised financeLet me start by recognising the transformative potential of the technology. At its core, the modern financial system relies on a system of ledgers. Every bank deposit, every security, every loan is recorded on a ledger maintained by a financial intermediary. And most financial transactions ultimately rely on well-established – but also complex and costly – processes for updating and reconciling those ledgers across financial institutions. Tokenisation – and the use of distributed ledger technology in finance – supports two core innovations. First, it enables a shift to shared ledgers that different parties can simultaneously agree on and update. Second, it enables programmability of transactions, with the shared ledgers not just containing a record of ownership, but also information that enables the execution of transactions based on pre-defined conditions.While these innovations relate to the underlying ‘plumbing’ of finance, their implications go far beyond that. Tokenisation offers the potential for real-time or near-instant settlement in markets, reduced counterparty exposure, 24/7 system availability and lower operational costs. Together, these can make financial services substantially more efficient, with ultimate benefits for households and businesses in terms of cost, speed and availability. But the potential of tokenisation goes beyond efficiency of existing services. It can also support the emergence of entirely new services, meeting the evolving needs of households and businesses. Smart contracts, for example, have a range of possible applications in wholesale markets and in retail financial services.  Tokenisation can also deliver an additional way to achieve fractionalisation of assets, broadening retail participation in capital markets. And, as with all technological innovations, it is likely that tokenisation can lead to the emergence of services that we may not even have thought about today. Market interest in tokenisation is growing rapidly. Financial institutions globally are building capabilities, piloting use cases and investing in the underlying infrastructure. In a recent Eurosystem ad hoc questionnaire, respondents expected tokenisation to become the dominant venue for asset issuance, settlement and trading within the next decade. Chart 1: Market participants expect tokenisation to scale over the next decadeSource: Eurosystem Survey on “Trends and Adoption of Tokenisation”. Notes: Survey respondents were asked the following: “When do you expect tokenised markets to become the dominant venue for asset issuance, settlement, and trading?”. Total number of respondents was 52.In practice, of course, we are still at the very early stages of this evolution. Tokenised real-world assets on public blockchains, for example, increased more than threefold over the past year, but still represent a tiny share of global financial assets.Chart 2: Real-world assets on public, permissionless chains have grown rapidly, but are very small stillSource: rwa.xyz.Navigating the transition towards tokenised finance In thinking about how we collectively navigate this transition, it is important to recognise two realities upfront. First, that this is a system challenge, requiring coordination across the sector. And, second, that we do not have certainty over what the precise configuration of the financial system in the future will be. Let me briefly cover each.A system-wide evolution…Technology, in and of itself, will not deliver the benefits of tokenisation for users of financial services. We know that from history. Past transformative technologies only realised their potential when entire systems adapted around them. Railways required common track gauges and standard time keeping. The telegraph required coordination around signalling and traffic.2 Tokenisation in finance is similar. For example, to unlock the true potential of tokenised finance, it is important to consider jointly the tokenisation of assets and money. Any financial transaction requires a cash leg, so both are essential foundations of a DLT-based ecosystem to flourish. That, in turn, requires an evolution in both private and public forms of money. In addition, for the benefits of tokenisation to be realised, interoperability across systems, networks, and jurisdictions will be essential. If that is not there, we may see a costly and inefficient fragmentation of liquidity across markets. So, a systems lens is required for tokenised finance to scale and deliver on its potential. No individual market participant can, on their own, transform finance. The entire ecosystem needs to evolve and adapt, if we are to avoid a fragmented, siloed, riskier landscape in the future. …with uncertainty around the future end-state.Beyond being a systems challenge, it is also important to recognise that we do not know with certainty what the precise configuration of the financial system in the future will be. Tokenisation has the potential not just to rewire the technological underpinnings of finance, but also reshape the structure of the system itself. Let me illustrate this point with three examples, which – in my view – are particularly macro-relevant.The evolution of private moneyThe first relates to the evolution of private money. A key feature of the DLT-driven innovation to date has been the emergence of new forms of private money-like assets in the form of stablecoins.Chart 3: Stablecoins have grown markedly, acting as the key instrument for setting transactions on-chainSource: rwa.xyz.Stablecoins are currently the main settlement asset of DLT-based transactions and, increasingly, are being used for broader purposes, such as cross-border payments.3Stablecoins offer many of the technological benefits of DLT-based infrastructures. But they also entail a higher risk of deviation from par.4 And, especially if issued by non-banks, they can also lead to a substitution away from retail deposits issued by the banking system, with macrofinancial implications. Recent ECB research, for example, has found that large-scale substitution of retail deposits into non-bank stablecoins could weaken the transmission of monetary policy, affecting bank lending to firms and households.5Tokenised bank deposits are another DLT-based form of private money. 6 They can harness the technological benefits of DLT, within the existing two-tier monetary architecture. And, because of that architecture, they do not pose the same risk in relation to deviation from par. They also better support the credit creation mechanism, especially in bank-based financial systems.Looking into the future, it seems likely that different of forms of private money will co-exist. That is also the case now, with usage depending on consumer preferences and the offerings provided by the financial system. Underpinning that co-existence, of course, is trust that a unit of currency has the same value regardless of who issues it. Indeed, most people do not experience any difference between different forms of private money. As we navigate the evolution of private money, maintaining that core foundation is essential.The shape of the capital markets ecosystemThe second dimension relates to the shape of the capital markets ecosystem. Tokenisation may significantly alter the role of established and regulated intermediaries – such as CSDs, custodians, or clearing houses. Certain functions currently conducted by such intermediaries may be embedded directly into smart contracts or distributed ledgers. While this can reduce operational frictions, it may also reallocate roles and activities away from institutions subject to regulatory and oversight frameworks toward technological components. At the same time, tokenised capital markets may become increasingly dependent on new entities – such as validators, oracles or bridge operators – whose activities could become increasingly systemically relevant. The reshaping of the capital markets ecosystem also represents an important opportunity, especially for Europe. The European capital markets landscape emerged organically out of countries’ domestic infrastructures. This has resulted in a fragmented landscape of clearing and settlement systems. As the tokenised capital markets ecosystem develops, a guiding principle should be supporting the deepening and integration of European capital markets. The configuration of the DLT infrastructureA final important question relates to the future configuration of the underlying DLT infrastructure itself. In recent years, we have seen the development of a growing number of underlying DLT platforms. There are different conceivable architectures for a future DLT ecosystem. Will we end up with a small number of underlying DLT platforms consolidating much of the on-chain activity, or will there be more competition at the infrastructure level? Similarly, will most of the future on-chain activity be on permissioned DLT networks, or is there a future in which public, permissionless platforms become increasingly prevalent for the tokenisation of real-world assets?These remain open questions still. And the different configurations matter for ultimate economic outcomes: competition and innovation at the infrastructure level; the integration of liquidity across markets; governance and accountability, as key enablers of resilience. What is clear, though, is that any ultimate configuration needs to ensure interoperability, prevent fragmentation and maintain strong and accountable governance of the core infrastructures supporting finance.How the Central Bank is responding Let me now turn to how the Central Bank – as part of the Eurosystem and the European System of Financial Supervision – is approaching the emergence of tokenised finance. To be clear upfront, our overall stance is positive. We very much recognise the benefits it can offer for consumers of financial services and the economic opportunities it can unlock. Nevertheless, this is not a predetermined outcome. Broader foundations – beyond technology – need to be there for that to happen. Our contribution centres around providing several of these foundations, so that the system can realise the benefits of tokenisation, while managing risks. Evolution of central bank moneyA key dimension of our response is the evolution of central bank money. In any economy, central bank money is the safest, most liquid financial asset, acting as an anchor of stability for the financial system and the broader economy. As finance shifts to a tokenised infrastructure, it is essential that central bank money continues to play that role.  We are working to ensure that central bank money remains fit for the digital age, both at a wholesale and a retail level.On the wholesale side, the Eurosystem has been progressing an important project to enable settlement of DLT-based transactions in central bank money. The initial launch phase will be later this year, making the Eurosystem amongst the earlier major central banks in the world to enable such an outcome.7 The exploratory work that preceded this project demonstrated a strong appetite from the market for such a foundational response. Ensuring that wholesale DLT-based transactions can settle in central bank money is a key enabler for the broader tokenised ecosystem to scale effectively and safely. On the retail side, the Digital Euro project is progressing at pace.  While not relating to DLT infrastructures per se, the objective of the Digital Euro is very clear: to give citizens and businesses a reliable, public, digital form of money that works anywhere in the euro area, complementing cash. That will also preserve the role of central bank money as the anchor of the retail payments system. As part of the Eurosystem, we are contributing to the design of, and preparation for, the Digital Euro. And, in the second half of this year, we will be supporting our colleagues in the Department of Finance as they lead the negotiations to progress the Digital Euro legislation during Ireland’s presidency of the Council of the EU.Acceptance of DLT-based assets as eligible collateralA second dimension of our response relates to the acceptance of assets as collateral in our monetary policy operations, which research has shown can have a positive effect on market functioning.8 In March, the Eurosystem took a first step in that direction by starting to accept marketable assets issued in central securities depositories using DLT.9 And we have launched an ambitious workplan to explore if, how and under what criteria assets issued using DLT – and not represented in eligible securities settlement systems – could become eligible as Eurosystem collateral in the future. This reflects the Eurosystem’s continued commitment to encouraging innovation and technological progress, enhancing market efficiency, and contributing to the integration of European capital markets.A responsive approach to regulation, supervision and oversightA third dimension of our response relates to our approach to regulation and supervision, which has been – and continues to be – responsive to the innovation we are seeing in finance. The regulatory framework itself has already adapted to the growth of digital assets, with the introduction of MiCAR in Europe. The Central Bank is the National Competent Authority for the authorisation and supervision of MiCAR entities in Ireland. We have put in place a well-resourced and expert team to authorise and supervise these new entities. With tokenisation becoming increasingly embedded in finance, it will also become increasingly relevant to all aspects of our supervisory work – as demonstrated, for example, by last week’s announcement by two retail banks to join a consortium of European banks issuing a stablecoin. The Central Bank’s Innovation Sandbox is another example of our responsive approach to regulation and supervision. It provides a structured environment for firms to develop and test innovative financial products and services in close dialogue with us.  It allows us to build insights into how these technologies work in practice, and to consider their implications for consumers, for market integrity, and for financial stability. This year’s sandbox, focused on innovation in payments, already includes initiatives that deploy DLT applications. And I expect that future iterations of the sandbox will continue to explore tokenisation in finance. We also recognise that there may be areas where the regulatory framework may need to adapt. This is one of the reasons we issued our Discussion Paper on tokenisation in March.10 Amongst others, we want to understand whether there are any specific elements of the current Irish or EU regulatory or legal frameworks that need to evolve, to remain fit for purpose as tokenisation scales across the financial system. The deadline for response to the Discussion Paper is next week, and we want to hear from a wide range of stakeholders.A catalysing roleFinally, a somewhat subtler, but still important, part of our response is acting as a catalyst for the system to co-ordinate towards better outcomes from a public policy perspective. In Europe, we do this through our contribution to the Eurosystem’s work to develop a longer-term vision for a European tokenised financial ecosystem.11 That work will entail significant engagement with the private sector – and I urge many of you in the room to grasp these opportunities as they become available. Because, ultimately, designing the future ecosystem relies on an effective public-private partnership. Domestically, we do this through the Central Bank’s ‘convening power’ and active engagement with market participants via different fora – such as the Irish Retail Payment Forum or the Financial Industry Forum. These offer opportunities to identify areas where engagement and collaboration across different parts of the ecosystem could lead to better outcomes from a public policy perspective. ConclusionLet me conclude here. We are at a pivotal moment in the next wave of a technological rewiring of finance. Done well, tokenisation has the potential to both make finance more efficient as well as to lead to the provision of new, innovative services to meet the evolving needs of households and businesses.But that is not a predetermined outcome. At the Central Bank, we are setting core foundations to enable that: central bank money as the system's anchor; regulation that is adaptive, and continues to safeguard financial stability, safety and soundness, consumer protection and market integrity; and coordination across the ecosystem to avoid fragmentation. The shift towards tokenised finance is an opportunity for Europe and for Ireland to strengthen our financial system so that it supports the broader economy into the future. And it is an opportunity we need to collectively grasp. Thank you for listening this morning and I look forward to continuing the engagement on this important topic over the coming months and years. [1] I am very grateful to Seán O’Sullivan, Anne Marie McKiernan, Mícháel O’Keefe, Ray O’Connell, Rosemary Hannah, Gillian Phelan, Patrick Haran, Reamonn Lydon and Gavin Ó Ceallacháin for their advice in preparing these remarks.[2] See, for example, Spar (2001) ‘Ruling the Waves: Cycles of Discovery, Chaos, and Wealth from the Compass to the Internet’, Harcourt Trade Publishers.[3] See, for example, Adrian et al (2025) ‘Understanding stablecoins’, IMF Departmental Paper, and Barta et al (2026) ‘Stablecoin payments: the truth behind the numbers’.[4] See, for example, Kosse et al (2023) ‘Will the real stablecoin please stand up?’, BIS Papers.[5] Altavilla et al (2026) ‘Stablecoins and monetary policy transmission’, ECB Working Paper.[6] See, for example, G30 (2026) ‘The past and future of money: new technologies and economic risks’, and Lagarde (2026) ‘Stablecoins and the future of money: separating functions from instruments’.[7 See, for example, Cipollone (2025) ‘Innovating for stability: central bank money in the digital era’, and more information on the Pontes project.[8] Pelizzon et al (2024) ‘Collateral eligibility of corporate debt in the Eurosystem’, Journal of Financial Economics, Volume 153.[9] See ECB paves way for acceptance of DLT-based assets as eligible Eurosystem collateral.[10] Central Bank of Ireland (2026) ‘DLT and tokenisation in finance services, Discussion Paper.[11] ECB (2026) ‘Appia – paving the way for a future-ready, integrated financial ecosystem leveraging tokenisation and DLT’. 

Good afternoon and thank you for the opportunity to speak to you today. It is great to see the energy and commitment to the credit union movement evident here today and reflected in your agenda for today’s conference.1Today’s event is especially timely, coming not long since Minister Troy’s announcement in April of the Credit Union Strategy Project, which provides an opportunity to future proof the credit union sector to overcome challenges and meet opportunities. The Central Bank welcomes the opportunity to support this project, which will build on recent reforms including the Credit Union (Amendment) Act 2023 and revised Central Bank lending regulations that introduced expanded capacity for house and business lending.2The Credit Union Strategy Project is focused on the future. So too will be my remarks today. The Role of Credit Unions in Ireland's Financial SystemCredit unions occupy a distinctive and valuable place in Ireland's economic landscape. You provide financial services to 4.25 million members across the island of Ireland. You support local economic activity and the full arc of members' lives.You represent a significant part of our financial system – and one we at the Central Bank must continue to look at through a systemic lens. This requires that you too think systemically as you develop your community finance model to support your members’ needs.This community finance model also includes credit unions working together through shared service organisations (CUSOs). The Central Bank will shortly commence a consultation process to establish a regulatory framework to further support the development of these CUSOs.We should all want to see a sector of this scale be strong, trusted and sustainable. This means a credit union sector that is financially sound, well-governed and capable of properly managing risk. It means a sector that protects members' interests and contributes to financial stability. It also means a credit union sector that is positioned to deliver the services members want to a standard they expect and in an increasingly digital landscape. The Changing Digital LandscapeCredit unions have adapted before to meet members' needs. I am sure you will look to now do so again in the face of the digital transformation underway. I have heard that your message to members is “we’re digital when you want it, but human when you need it”.3 This is a powerful message and one I applaud.But the pace and scale of change now being driven by technology is more profound than in the past. It is reshaping services and consumer expectations, as well as opening up new options to consumers for information, advice and financial services that simply did not exist before.At a societal level, it is also transforming the traditional ideas of community.  To put it bluntly, it is no longer just the local bank you are competing with. In order to grow within this landscape, credit unions will have to continue to mature to meet member demand, operational necessities and regulatory requirements.  Today, I want to put two thoughts in your mind as you look to the future of your movement:First, the role of the Consumer Protection Code in supporting the evolution of the credit union movement, designed as it was with this digital landscape specifically in mind.Secondly, the more prominent role I believe credit unions could play in supporting their members’ financial literacy and broader financial wellbeing during a period of great change. The Consumer Protection Code – rules tailored for a more digital age Our modernised Consumer Protection Code (CPC 2025) was published in March 2025 and came into force on 24 March 2026. As you will know, the Code applies to credit unions when providing certain services, such as selling insurance. But it does not apply to credit union services more generally. This means credit union members do not always have the same statutory protections as bank customers – for example, when taking out a mortgage.  That position is set to change with the application of the modernised Consumer Protection Code to the full breadth of credit union activity. We are in the process of concluding our assessment of the submissions received in our public consultation on the application of the Code to credit unions.  I thank the Irish League of Credit Unions for their thoughtful submission which has been helpful in informing our thinking. This brings me to the central theme of my remarks today – a modernised Code for a modernising credit union movement. Because one of the aspects of the revised Code that you may or may not have focused on is that it has been tailored to be fit for purpose in a landscape that is more digital and has a wider variety of firms providing day to day financial services and advice. I suggest to you therefore that the new Consumer Protection Code is custom made for a credit union sector looking to expand its services in a more digital landscape while retaining its core values. To take a few examples: The new Code places “Securing Customers' Interests” at its heart. An emphasis on serving, securing and protecting members interests is not a novel concept to credit unions, given the sector’s guiding principle of being not for profit, not for charity, but for service. The new Code recognises the vulnerabilities consumers may face in different situations, as well as the scope for financial abuse in our communities. Being at the centre of communities enables credit unions to understand a vulnerable member’s needs, and interact in an empathetic and understanding manner.The new Code moves us from a standard of simply disclosing things to one of ‘informing effectively’. Credit unions consistently rank highest in public surveys on trust and reputation. These scores are underpinned by strong communication flows between credit unions and their members.Finally, the new Code imposes obligations to ensure digital services are designed and implemented with a customer focus, with transparency about how data is used, and to maintain robust systems to guard against cyber risks. Credit unions have been careful to continue supporting members through technological change. ImplementationOf course, these regulatory reforms will only be as good as their implementation. Implementing the Consumer Protection Code will require effort. We've undertaken a costs and benefits assessment, and we've heard from credit unions about the resources required. It tells us that the costs are manageable, not least taking into account the extent to which credit unions’ practices already align with many of the Code’s principles. And yes, the Central Bank will support credit unions in their implementation of the Code as we did for its coming into force for other sectors in March of this year. We see the Consumer Protection Code as the beginning of a living regime rather than the end of reform. The pace of change will continue. Digitalisation will accelerate. New products will emerge. AI will become more sophisticated. Climate impacts will intensify. We will continue to listen and adapt. As a framework for credit unions, the Code is custom made for such an evolving landscape, with its combination of broad future-proofed principles coupled with more detailed provisions in areas where our rulebook is more mature (such as mortgages).The application of the Consumer Protection Code to the full suite of credit union activities represents a defining moment in the growth of the credit union movement. It recognises the credit union as a professional provider of regulated financial services on a par with other financial institutions providing the same services – while leaving it open to credit unions to develop their business model to suit their members’ needs. Financial LiteracyThe second theme I want to speak to you about today is that of financial literacy and broader financial wellbeing – where I believe credit unions could play a greater role.  The Credit Union Act 1997 requires you to train and educate members in the use of money. This statutory obligation reflects something fundamental: financial capability matters, and credit unions have a responsibility to build it. The Central Bank, for its part, is supporting financial literacy through Ireland's National Financial Literacy Strategy. The credit union sector has been identified as having a key role to play to deliver concrete change and improved financial literacy in those groups with lower levels of financial literacy and younger people generally. The Strategy recognised the ‘Start Money Smart’ initiative developed by ILCU as a positive case study in promoting financial literacy in primary schools. Further objectives from the Strategy include a strengthening of consumer understanding of credit and debt, which ILCU affiliated credit unions are providing through their “Clued In” education program that is targeted at second level students. When considering financial literacy, it is important to recognise that we don't want a population that understands financial concepts for the sake of it. We want a society that has the resilience to withstand economic shocks, the confidence to secure its own financial future, and a financial system that supports consumers to achieve their own financial wellbeing.4 Credit unions are uniquely positioned to foster this. The provision of budget account services to members is an example. And there's scope to do more. You can educate members to ensure they understand financial products and services and make informed choices. You can support both financial literacy and financial wellbeing and I know that you feel passionate about this. This isn't peripheral to your mission: it is a central tenet of it.The evidence is there that there are some things we learn better face-to-face. Your movement’s commitment to human-to-human interaction in the delivery of your services provides a unique opportunity for you to play this role in our society – to join up financial education, financial services and an overall conversation on your members’ financial wellbeing in your communities. I encourage you to consider the evolution of your movement through this lens. ConclusionCredit unions retain an important role in Ireland's domestic financial system. You serve people in their everyday lives in communities across the country. You support local economic activity and provide financial services with a human dimension in an increasingly digital world.I can see that credit unions are working to evolve in ways that bring real benefits to members. The Consumer Protection Code is designed to support that evolution - to provide a framework that guides you and protects your members as you expand into new products and delivery channels, consistent with other financial service providers. The Central Bank is committed to supporting credit unions through its implementation of the Code. We will engage with you on topics or aspects you wish to discuss. We will listen to your concerns. And we will work with you to ensure that credit union members receive the protections they deserve – modern protections for a modernising credit union movement.Thank you for the opportunity to speak to you today. I wish the Irish League of Credit Unions well for the rest of its Conference. I hope my remarks will be helpful to your discussions today and into the future. [1] My thanks to Eoin Sheanon and Eamon Clarke for their help in preparing these remarks.[2] Credit Union (Amendment) Act 2023 and revised Central Bank lending regulations that introduced expanded capacity for house and business lending[3] How are Credit Unions Different?[4] View a discussion on the interplay of financial education and financial wellbeing 

Governor of Central Bank of Ireland Gabriel Makhlouf today (Tuesday 19th May) spoke at the AFME Annual European Financial Integration conference, where he called for a more ambitious approach to Europe’s Single Market, arguing that greater integration in goods, services and capital is essential to enhance European competitiveness and resilience. The Governor outlined two primary conditions for building a genuine single capital market: completing the regulatory architecture and establishing a single safe asset.  “The Single Market is one of Europe's greatest political and economic achievements and has already raised EU GDP by 3-4%. Completing it could double these gains, bringing greater growth, greater resilience and greater opportunities for the citizens of Europe.” Governor Makhlouf said. “The single market for capital cannot be separated from the single market for services. The cost of this unfinished project falls on every business, every household, and every citizen in Europe.”He also acknowledged the demand-side challenges to capital market development, including uneven tax treatment, financial literacy and cultural norms.“Europe cannot build a single capital market if its citizens are not active participants in it. Progress on the demand side will not be swift – changing cultural attitudes to investment is not something that moves quickly – but it needs to start.”Governor Makhlouf stressed the critical role of national governments in delivering the Single Market agenda, pointing to Ireland’s recent launch of a comprehensive national framework for Single Market implementation, pension auto-enrolment, legislating for a Personal Investment Account framework by 2027and a retail investment tax roadmap.Commenting on the role of central banks in maintaining and deepening capital markets, the Governor said “There is broad agreement that Europe needs more convergent supervision. Convergence in outcomes is what matters. Regulating well also matters.  Simplification for us at the Central Bank of Ireland means implementation before legislation: simplify the application of existing rules before layering on new ones. Simplification is not the enemy of robust regulation. Done properly, it is what makes robust regulation credible and durable.”Concluding, Governor Makhlouf said “We have seen that Europe can, when it chooses to, build common instruments that work.  The starting point for doing that well is to avoid thinking in boxes or silos but consider the bigger picture that can deliver a genuine single market in goods, services and capital.”ENDS

Thank you for the invitation to speak this afternoon.I want to talk about the Single Market, which is one of Europe's greatest political and economic achievements. Over more than three decades, it has been an engine of European growth and resilience, delivering scale, opportunity, and tangible benefits for citizens and businesses across the Union.  As António Costa has pointed out, it connects 450 million consumers and 32 million companies, supporting around 56 million jobs through trade within the EU.But we have taken too narrow a view of what the Single Market should be at a cost of missing out on greater growth, greater resilience and greater opportunities for the citizens of Europe. What follows is an argument for more ambition for Europe’s Single Market, building on what already exists in order to continue to grow the income per capita of our citizens, and at the same time build resilience to the new geoeconomic context we are facing.The title of my speech, “One Single Market: Goods, Services and Capital”, captures the point I want to emphasise. A well-designed Savings and Investments Union (SIU) is important, and I have spoken about it before, including at Eurofi in March. But the SIU alone will not deliver the productivity boost Europe requires if the Single Market it sits within is not working as it should. So my question for today is this: what would Europe actually look like if it were operating as a genuine Single Market in goods, services and capital simultaneously, and what will it take to get there?Single Market ambitionsThe European Commission estimates that the Single Market has already raised EU GDP by 3-4%.  Completing it – that is, removing outdated rules, standards and inconsistent national regulations that hamper trade in goods and services within the bloc – could double these gains. The biggest upside is in services, which account for around 75% of EU GDP and the largest share of European jobs, yet intra-EU trade in services stands at just 7.6% of EU GDP. Notably, this figure is no higher than Europe's services trade with countries outside the bloc.  Many of the barriers that produce this outcome are long-standing, well-known, and persistent.The European Commission’s recent Single Market Strategy identified the ten most harmful barriers holding back intra-EU trade and investment. They include restrictive national regulations on services that prevent companies from operating across borders, lack of common standards, and complicated business establishment rules. The Commission also identified a lack of single market ownership by national governments as contributing to an inconsistent implementation of already agreed rules.  In other words, the rules exist, the political commitment was made, but the implementation has lagged. This is not a problem that more EU legislation will solve on its own. It requires national governments to take active ownership of the Single Market agenda.I was very pleased to see that last week the Irish Government acted on this ownership challenge and launched a comprehensive new national framework for Single Market implementation. This includes a new dedicated Single Market Office, an Advisory Panel from the private and public sector, and a senior official appointed as Ireland's Single Market ‘Sherpa’ to translate political direction into practical action. This positive development reflects something important: that a key step in truly completing the Single Market will be Member States taking responsibility to deliver it at home.Why does all of this matter for a room of financial services professionals? Because financial services are a services sector. The barriers that limit a law firm or an accounting practice from operating seamlessly across EU borders are close relation of the barriers that fragment European capital markets, raise the cost of cross-border investment, and keep European savings trapped in national systems (or outside of the EU) rather than flowing to their most productive use within Europe. The single market for capital cannot be separated from the single market for services. The cost of this unfinished project falls on every business, every household, and every citizen in Europe.Capital markets diagnosisThe EU banking sector has assets of around €33 trillion. Debt securities add a further €24 trillion, with the bulk of this public or banking sector debt. Europe has a substantial financial system, yet when it comes to debt or equity-financing for non-financial firms – the part of the financial system most directly associated with risk capital, innovation, and growth – the picture changes. We see this in EU stock market capitalisation, which at 73% of GDP in 2024 is around a quarter of the size of the US equivalent. This is a structural feature of how Europe's financial system is built, and it has consequences.As Mario Draghi’s Report makes clear, the capital market gap and the innovation gap are two sides of the same coin. EU venture capital investment in 2025 totalled around €66 billion, or around one-fifth the equivalent figure in the United States, and the gap widens sharply as firms mature: at the scale-up stage, EU venture capital drops below 10% of US levels.  As Draghi points out, Europe has no shortage of innovative start-up firms. Rather, what it lacks is a deep capital market to grow them into large ones.A common response to this diagnosis points to regulatory fragmentation. This matters, of course, but I see it as a symptom as much as a cause. We need to address the underlying constraint, which is that we do not yet have a genuine Single Market, especially for trade in services. And without one, regulatory harmonisation alone will not close the gap.The SIU addresses part of the gap. It is welcome, it is necessary, and I support the Commission's work on it.  In the next section I mention two conditions that need to be met to deliver SIU.  But we also need to remember that SIU operates within the Single Market as it currently exists. If that market remains fragmented then the SIU's ambitions will be constrained by the architecture it sits within. Single capital market - what would it actually takeI see two primary conditions that need to be met.The first is completing the regulatory architecture, including harmonised insolvency frameworks, convergent tax treatment of cross-border investment, and deeper and more liquid post-trade settlement infrastructure. The Commission's Market Integration Package, published last December, moves in the right direction, as do the ongoing SIU initiatives.The second condition is that a genuine single capital market requires a single safe asset – something I and my colleagues on the Governing Council have pointed out before. This is the foundation for the architecture of the SIU. In its absence, pricing and collateral remain fragmented, and the prospect of building a deep European capital market at scale is hampered from the outset.The NextGenerationEU (NGEU) programme demonstrated that Europe could issue common bonds at scale, backed collectively by member states, and that when it does, markets respond. Outstanding debt now stands at close to €800 billion, carrying a AAA rating, with secondary market liquidity that has deepened over time.And yet, NGEU bonds do not yet fully behave like safe assets. The spread over German Bunds has averaged around 50 basis points since 2022, although this is not too different from GDP-weighted spread on European Sovereigns. Their one-off and time-limited nature means they are also excluded from the main sovereign bond indices, limiting the investor base. NGEU showed that when there is a will there is a way, but it should not be viewed as the end goal.  We need to look further, to create the infrastructure for a genuine common safe asset. So, what could the end goal look like? One option is a permanent, scaled European safe asset to finance investment in European public goods, as proposed by Joachim Nagel and, more recently, Philip Lane. Examples include the green transition, digital infrastructure, and security and energy independence. Olivier Blanchard and Ángel Uribe have argued persuasively for the creation of a deep, large and liquid market for Eurobonds in order to deliver the financial strength needed for its strategic autonomy.  As the Draghi Report showed, financing the required level of spend through fragmented national bond markets, each priced differently and held in national portfolios, is both less efficient and less resilient than the alternative. Europe has shown it can do the alternative. The question is whether this can be moved onto a more permanent basis, and not just crisis-linked and time-limited cases.  A safe asset would also support the greater internationalisation of the euro, building on the ECB Governing Council’s recent revisions to the ECB’s repo facility (EUREP) to make euro-denominated assets more attractive to global investors.I acknowledge that this is not all a ‘win-win’ proposition. If it was, we would not be in a situation where the barriers to completing the Single Market are acting as a structural drag on European competitiveness, as Enrico Letta puts it, or its productivity as I prefer to put it.  There are trade-offs involved, not least that more integration could mean less national flexibility.  But the question is not whether there are trade-offs – there always are – but whether the cost of not acting now exceeds the cost of acting. And on that question, I believe the evidence is clear. The productivity gap with other countries such as the US is widening, not narrowing.  And the longer we delay, the more expensive the adjustment becomes and the less competitive Europe will be in a world where capital, talent, and innovation remain mobile.Ireland as illustration: the demand sideLet me bring this closer to home, because the Irish experience illustrates another aspect of the European challenge: the demand side.Ireland is a major global financial hub, home to both a large funds sector and a growing fintech sector.  And yet on the retail or household side participation in capital markets remains among the lowest in Europe (e.g. see recent Central Bank of Ireland research on Irish households’ fund holdings and savings behaviour).  As of March this year, Irish households had €172 billion on deposit with banks, with around 85% of it in overnight accounts earning little interest. Household wealth stands at a new high, averaging around €724,000 per household, with two-thirds concentrated in housing. Why do we see this gap between what the Irish financial sector is providing at a global level and what households are choosing to participate in? The answers go beyond the supply-side fragmentation I have previously mentioned. One issue is uneven tax treatment, which tends to incentivise deposits or property over other investments. Another is financial literacy, which is a national priority. Cultural norms and attitudes to savings and investment that are focused on real assets – i.e. housing – are also an important factor.These are not problems that harmonising EU regulations will fix.  They also require national action on a range of fronts. Last month the Irish Government brought together industry and regulators to begin addressing these barriers in a structured way. The Government has committed to legislating for a new Personal Investment Account framework by 2027, alongside a retail investment tax roadmap.  Pension auto-enrolment is also now live.These changes represent significant structural interventions to channel household savings into long-term investment, with auto-enrolment alone bringing many Irish workers into pension saving for the first time, through default funds invested in diversified asset classes. The point I want to make is this. Even if everything at the European level goes right, the SIU will still fall short of its potential if national barriers like these are not addressed alongside it. Europe cannot build a single capital market if its citizens are not active participants in it. Progress on the demand side will not be swift – changing cultural attitudes to investment is not something that moves quickly – but it needs to start.The Central Bank of Ireland: what we’re doingCentral banks underpin stable capital markets through delivering monetary and financial stability – an essential pre-requisite for successful capital markets. Regulators also play a key role in ensuring the market is well-functioning and that investors are protected. I am conscious that arguments for deeper European integration can sometimes sound better from a podium than they look in practice. So let me say something about what the Central Bank of Ireland is doing to advance this agenda, because it matters that words and actions point in the same direction.  I’ll mention two things.First, supervisory convergence, and here I want to be precise about what I mean. There is broad agreement that Europe needs more convergent supervision. This means that the same rules should be applied in the same way across Member States, that regulatory arbitrage is avoided, that compliance costs for cross-border groups are minimised, and that supervisory processes are faster and more predictable. I share those objectives fully, and we prioritise and actively contribute to supervisory convergence at the European Supervisory Agencies, promoting best practices in authorisation, supervision and a common approach to risk identification across the EU, among other things. But having said that, I would add a note of nuance on the question of how convergence is best achieved. The answer is not necessarily always more centralisation. It can also be achieved through even greater collaboration between national and European authorities, through stronger common standards applied consistently at a national level, and through the kind of mutual trust and shared supervisory culture that takes time to build but, once built, is likely to be more effective and more durable than any institutional restructuring. Convergence in outcomes is what matters. Second, regulatory simplification.  Last December we published our roadmap, Regulating and Supervising Well, a multi-year programme to make our framework more effective, clearer to navigate, and more proportionate, without compromising resilience. It covers four areas: supervision, regulation, gatekeeping, and data reporting. Specific commitments include retiring domestic AML publications that duplicate the new EU rulebook, streamlining authorisation processes for funds and market participants, and introducing “discipline-by-design” tests for any new reporting requirement, checking necessity, proportionality, and potential for re-use before a request is made. Our guiding principle is implementation before legislation: simplify the application of existing rules before layering on new ones. Simplification is not the enemy of robust regulation. Done properly, it is what makes robust regulation credible and durable.ConclusionEurope has the talent and the institutional foundations it needs to grow. But that potential is not self-realising. We have seen that Europe can, when it chooses to, build common instruments that work.  The starting point for doing that well is not to take a narrow view of what the Single Market should be.  The Single Market for Capital cannot be separated from the Single Market for Services.  If Europe’s Single Market continues to remain fragmented then the ambitions we all have for a successful Savings and Investment Union will remain contained.  We all know we can do better.Thank you.

Aviva Life & Pensions Ireland DAC (Clone) - Central Bank of Ireland Issues Warning on Unauthorised Firm

The Central Bank has today (15 May 2025) announced the appointment of Glenn Calverley to the role of Director of Finance and Business Performance. Mr Calverley will take up his role with effect from 1 September 2026.Glenn brings a wealth of experience to this role, most recently as Director of Strategy & Governance, a role he has held since 2021. He joined the Central Bank in 2015, initially as Head of Organisational Risk and later as Head of Strategy & Foresight. Prior to joining the Central Bank, his career included various senior management roles within commercial banking in the areas of risk management and organisational change. Announcing the appointment Governor Makhlouf said: “I am very pleased to announce Glenn Calverley’s appointment as the Central Bank’s new Director of Finance & Business Performance.  Glenn brings strong strategic leadership and organisational experience to this important portfolio; where he will lead the Central Bank’s financial strategy and financial management; and oversee the monitoring of our organisational performance.”ENDSFurther informationElaine Scanlon elaine.scanlon@centralbank.ie 087 2136313 

Central Bank of Ireland has made the memoir of former Governor T.K. Whitaker available digitally for the first time. While the memoir has been available for in-person viewing in the Central Bank's archives, it is now accessible online at www.centralbank.ie, allowing a wider audience to engage with this important historical document.The publication of T.K. Whitaker's Memoir: Central Bank and Government, 1969-1976 marks 110 years since T.K. Whitaker’s birth and 50 years since the end of his term as Governor.The memoir provides a first-hand account of a formative period in Ireland's economic history, and the relationship between government policy and central banking. The publication also coincides with the 2026 Whitaker Lecture, which was delivered by former Governor Patrick Honohan, who served as Governor from 2009 to 2015. The lecture series was established to honour Whitaker’s legacy and features a well-known figure from the field of economics. Past speakers include Mark Carney, Gita Gopinath, and Augustín Carstens. Speaking on the publication, Governor Gabriel Makhlouf said: “I am delighted that we are making this memoir more widely available. In doing so, we are helping to preserve an important part of the Central Bank’s own history and of the wider story of economic policymaking in Ireland. Contemporary readers can engage directly with Whitaker’s reflections on the responsibilities of central banking, the pressures of public finance, and the complexities of policy formation in a small open economy.“T.K. Whitaker stands among the most consequential figures in modern Irish public life. His contribution to the economic development of the State, to the quality of public administration, and to the shaping of policy through disciplined analysis and principled advice is of lasting significance.” ENDSFurther informationMartin Grant, martin.grant@centralbank.ie, 086 078 7868 

IntroductionGood morning – I am delighted to be here, and many thanks to Brian and the BPFI for hosting us.1 I very much look forward to the discussion, and to hearing from you all today, but before I do I would like to set out some reflections on a number of topics which are currently high on the regulatory agenda.While the discussion is multifaceted, and tied up with a regulatory cycle which has turned,  an economic one which has become more challenging, not to mention a renewed focus by policymakers on longer term challenges to productivity, innovation, and growth –  I will focus my remarks on what I would broadly categorize as the ‘3 Cs’, namely:CapitalCompetition andComplexityGiven their importance, and indeed their prevalence in the regulatory debate, I would like to set out my perspective on these 3 Cs as Deputy Governor for Financial Regulation at the Central Bank of Ireland – informed by our mandate, our experience, and the data and analysis we undertake. But before I do, let me very briefly touch on the current risk environment – the crucial context in which we are having this debate.Current risk environmentWe are living through a time of extraordinary change – with significant geo-economic shifts and fragmentation, coinciding with rapid and potentially transformative technological innovation. Such change is reshaping our economies, our financial system, and the risk landscape of the sectors we supervise and of the consumers and investors we work to protect.We set our views and thinking on this challenging risk environment and our priorities in our Regulatory and Supervisory Outlook (RSO) – and so I won’t go into detail on them now.2 I would just note that some of these risks are intensifying, and reiterate that while the sector has demonstrated its resilience in the face of such uncertainty, instability and complexity, you must continue to respond, ensuring that response is characterised by Resilience – financially and operationally, to withstand and respond to both traditional and novel shocks;Adaptability – so that the sector is able to continue to deliver on its important function, now and into the future, in the face of uncertainty and rapid change; andTrustworthiness – providing confidence to consumers and in the financial system through times of challenge and change, by maintaining trust, the crucial underpinning of the modern economy.CapitalLet me turn now to my first C – Capital – and the capital requirements in place for the banking sector. Since the first Basel capital accord in 1988, there has been a near continuous global debate on bank capital – a debate which is often procyclical, and follows the regulatory cycle, inevitably learning lessons, often hard learned, from that cycle.Alongside liquidity, the very oxygen of the financial system, capital is a crucial part of the resilience of the financial sector and banks’ own ability to withstand shocks. We have all seen what happens when the banking sector does not have enough capital – when it cannot absorb shocks, but rather amplifies them. And so robust capital positions play a fundamental role in the safety and soundness of banks and the wider system. Keeping the sector strong and resilient, is not about resilience for resilience’s sake – but rather so banks can continue to perform their important functions through good times and bad. This is why I firmly believe that a resilient, stable and well-capitalised banking sector is not just good for consumers: but good for banks, good for their investors, and good for the economy.In terms of setting capital, we think carefully about capital requirements, and follow what for me are some key tenets of modern capital setting, which include being:Risk based – to state the obvious, capital requirements should reflect the risks of a banks’ exposures, as well as the risks facing the system as a whole. Forward looking – capital requirements should be set to anticipate risks, and to prepare for future shocks, informed through regular stress testing; Coherent – while different aspects of the framework have different purposes, and are looked at through different lenses, the parts of capital setting must be cognisant of the whole – avoiding either underlaps or overlaps – something as an integrated central bank and regulator we are focused on3; andCountercyclical – a key principle is that capital is built up in the good times, rather than trying to build it in the bad times – given the vicious circles we have seen from pro-cyclicality in the past.  So what does that mean in practice?Well it means that capital requirements go up and down depending on the risk profile of an institution as well as the magnitude of the risks facing the system as a whole – and so banks will see reductions or increases in capital requirements informed by the risks they face. There is an onus on regulators to clearly explain movements in either direction, and be open to constructive challenge and debate.Capital requirements will be based on a robust and realistic assessment of the future, including plausible worst case stress scenarios. And capital should be used – and indeed requirements lowered – in the bad times, to ensure banks continue to lend through the cycle. This is why we have releasable capital buffers, on which strong institutions can and should draw in times of economic stress. But the capital framework we have is not a theoretical exercise – but a very real part of regulation in practice. And so in this regard, it is important to look at the numbers – the requirements themselves – not in isolation but in action.The 2020s so far has been an extraordinary one in terms of economic shocks and shifts.  While many of these shocks have seen unprecedented policy responses4, Ireland and the EU’s banking sector has shown real resilience in the face of the global shocks and financial volatility that has so far characterised this decade.We should take confidence from this. But of course confidence should not be confused with complacency – and policymakers may not always have the policy space to intervene.I would argue that a huge part of the strength demonstrated through the difficult times, has been the strength built up in the better times – of which ex ante resilience in the form of robust capital and liquidity positions are key.Furthermore, looking at the capital requirements during this period bears out a framework working broadly as intended and in line with good capital setting – with the requirements themselves built in advance, and broadly stable at the aggregate level throughout, aside from the reduction of the countercyclical buffer as part of the regulatory response to Covid, demonstrating that regulators will release buffers and reduce requirements when necessary.Figure 1: Capital Requirements by component parts, Irish and EU banks5Such strength built in good times, and relied on at times of stress, has been a huge asset for the sector, our financial system and the economy.  However, despite this, in the face of an increasingly challenging global outlook, there are now emerging – and increasingly explicit – calls for a lowering of capital requirements. I fully believe that regulators and policymakers should be humble, accountable and open to challenge and debate. But I also believe that independent regulators should actively engage in that debate – given the different interests at play, and their responsibility to serve the public interest.In that regard while it is healthy that regulations and requirements are regularly reviewed, to ensure different aspects of the framework are working right – which for me is the essence of simplification – an explicit focus on reducing levels of capital in itself to be honest sounds much more like de-regulation. This is why central bankers and regulators across the Eurosystem endorsed the firm principle last December that any proposals to change the EU prudential banking framework must sustain current levels of resilience.6This recognises that financial stability, and the stability of the banking sector, are a pre-requisite for sustainable growth. I of course acknowledge that mine is a regulatory perspective, and that there are others who believe the opposite, and that capital requirements are simply too high. In my experience proponents of lowering capital, usually focus on three things: boosting credit to the real economy, boosting profitability of the sector itself, and international competitiveness.But looking at the data and considering these three aspects suggests to me that lowering capital requirements is a solution in search of a problem.Firstly, credit growth has recovered significantly in the last few years, following the inevitable tightening that came alongside an unprecedentedly rapid monetary policy tightening cycle. Bank Credit growth in the euro area now stands at c.3%; and in an Irish context this figure is above 6%.7 This is in the context of a banking sector with significant headroom above regulatory requirements – over 600bps in Ireland and nearly 500bps in the EU, meaning capital requirements are far from binding, with banks having ample additional capital to support additional new lending.8 Combined this data does not suggest capital requirements are unduly constraining credit to the real economy – which is very much consistent with a large body of economic literature showing that at a steady state the level of capital requirements has little effect on bank lending, and that well-capitalised banks typically lend more to the real economy.9 10It is also consistent with information we have on bank lending conditions in the euro area over the last two decade, which indicates that while banks’ capital position (and related costs) was a constraint on lending during the Financial Crisis and early sovereign debt crisis, since then it has had limited effect on banks’ credit standards (with a slight exception during the pandemic).11Figure 2: Bank Lending Survey, credit standards loans to firms12Figure 3: Bank Lending Survey, credit standards loans to firms, IrelandIn terms of profitability, return on equity of euro area banks is at its highest since the introduction of the post crisis reforms, aided by aforementioned monetary policy normalisation. Now standing above 10% in both Ireland and the EU, this does not suggest to me that capital is unduly dampening profitability. This is also consistent with many studies that find that there is no evidence that higher capital requirements lead to lower profitability.13Figure 4: Return on Equity compared to CET1 requirements and headroom – Irish and EU banks14Or to put it another way this does not suggest to me that the balance between the resilience of the sector – crucial to the economic wellbeing of the country and our citizens – and the profitability of its banks – an important part of a long term safe and sound sector – is in conflict. Lastly, people cite international competitiveness – with the US and UK the jurisdictions often compared to by advocates for capital lowering. The first thing to say is it is very hard to compare like for like – there are different markets, different business models, and indeed different types of balance sheets. But as ECB research published last week shows, US large banks in fact face higher capital requirements than their European counterparts.15 This is the starting point for comparisons. I would also note that when Europe finalised its implementation of Basel III, it resulted in a lowering of capital requirements for some banks – including a 6% reduction in capital requirements for Irish banks, important context for the future debate.16But when we think of the competitiveness of the US vs Europe, it is the competitiveness of our economies  - indeed their productivity – that we should be focused on. And as we seek to close any competitiveness gap, it is not the overall levels of their bank capital that comes to mind for me – but rather it is their deep and liquid capital markets, providing risk capital and funding for innovation, alongside the dynamism and investability of their companies, that stands out. This is what we should be focused on as we seek to boost the productivity of our economy, and why Savings and Investment Union remains a priority for Europe. CompetitionThis brings me to my second ‘C’, namely Competition – another topic with many facets, and of course competition and competitiveness is subject to huge focus in the international debate.For my part I will focus on our sector here in Ireland – namely in terms of a) the domestic banking sector, b) Ireland’s broader banking and financial sector, and c) the role I feel central banks and regulators can and should play in this issue.Firstly, for the last number of years there has been understandable focus and concern about competition in the retail banking sector in Ireland. While no one has been advocating for the return to the unsustainable competition of the 00s, the exit of two full service retail banks in recent years naturally intensified concerns about competitive conditions in the sector and led to the Government’s Retail Banking Review.We fully recognise the importance of a competitive retail banking landscape for our economy. We engaged fully with and supported the Retail Banking Review and have been conducting our own research and analysis into this issue – in particular considering the profound structural transformation that has taken place in the financial system over recent decades, meaning it is not as simple as comparing like for like. Given the evolving financial system, we have always felt that focusing on the number and balance sheet of domestic retail banks gives an increasingly incomplete assessment of market structure in retail credit provision in Ireland, and does not capture an increasingly diverse lending market made up of foreign banks, non-bank lenders, and credit unions.In light of this colleagues in the Central Bank have undertaken an analysis of the state of the Irish loan market using granular loan-level data from the Central Credit Register.17 Analysing market concentration based on new lending, firm borrowing patterns across lender types, and loan pricing using loan-level data, the research yields a number of findings that offer a more nuanced perspective on the question of competition in the Irish loan market.The full paper is being published today but I will briefly highlight a few aspects. In business lending and consumer credit – key channels for the real economy – the paper shows the presence of these different lenders alongside domestic retail banks significantly reduces estimates of market concentration. When taking the full market into account, new business lending is more than 50% less concentrated and concentration metrics for consumer credit fall by almost 80%.  Importantly, this is not non-bank lenders merely serving borrowers excluded from the banking sector – rather a third of Irish firms, and 40 per cent of SMEs, borrow from multiple lender types – typically combining a core domestic banking relationship with non-bank credit. This points to an increasingly competitive, and much more dynamic, market than is often understood.As I noted, we will be publishing the full analysis today, but taken together the findings paint a much more diverse landscape than analysis relying exclusively on data related to domestic retail banks – and rather evidences a loan market characterised by a diverse ecosystem in which alternative lender types both contribute to market depth and provide alternative funding options for both SMEs and households.Such increasing diversity in terms of credit provision, is echoed in other segments of retail banking services, with an increasing number of digital banks, payments firms and e-money institutions adding competition in the areas of payments and deposits. Our focus here is on ensuring such new entrants are well-run and well-regulated, and subject to a robust authorisation and supervision, given their important responsibility being trusted with the public’s money.More broadly, as we have said before the last decade has seen extraordinary growth in Ireland’s financial sector – both in terms of scale and complexity – with some of the highest rates of growth occurring in the most complex parts of the system. For example, over the last decade the number of trading venues has increased from 2 to 5 and the number of complex trading firms has tripled to 10, with the size of that sector in terms of assets having grown more than 600%. Total assets under management by Irish authorised investment funds has grown from €1.7 trillion to €5.3 trillion.While there has been some consolidation in the number of banks, there has been significant growth in terms of scale of the banking sector– with total assets of Irish authorised credit institutions now above €770bn, growing by 70% since 2016.This comes alongside the pace at which the Payments and E-Money sectors have developed – with the number of PIEMI firms growing from 14 in 2016 to 58 in 2025, which includes 15 fold increase in safeguarded funds, now standing at near €12bn.2025 also saw the first new authorisation of a retail bank in some time; and judging by the authorisation pipeline we are currently dealing with our financial sector is growing and set to continue to grow.These metrics in terms of size and scale of the entities we supervise, are echoed by other metrics. When the Government launched its IFS strategy in 2015, international financial services was providing work to 35,000 people across the country.18 10 years later when it consulted on its upcoming strategy  in 2025, employment had near doubled to over 60,000.19 This growth is seen elsewhere, and indeed the BPFI’s own membership has also nearly doubled over that period from 70 members to over 125.All of this is exceptional growth by any measure. It is a success story for the sector and the Government – but it also says to me that Ireland’s international financial centre is strong, diverse and it is growing – and that Ireland does not appear to be unable to compete for financial services due to its regulations or its regulator. In fact I would argue in the long run a stable, robust regulatory environment is a key part of developing, and maintaining, an international financial centre – and so strong regulations and a strong regulator is in fact an advantage. This brings me to my final point on Competition – namely the role of central banks and regulators. This has become something of a debate once more - and both in Europe and domestically there have been some calls to give regulators a mandate to promote the competitiveness of the sector.While the regulatory cycle has clearly turned, I have to admit I am still surprised that so soon after the financial crisis – for which we are in many ways still paying the price – proposals for such a mandate have returned. A mandate, which as set out so well in the Honohan report20,  contributed so significantly to the failings of that period, and therefore the enormous economic and societal costs borne by the country and our citizens.While ultimately a matter for legislators, to address the suggestion directly let me say that I think our mandate is already broad, and I firmly believe well balanced.  As such – to be frank – I think adding a competitiveness mandate, even secondary, is simply a bad idea – and it is not clear to me what this has to with simplification as opposed to deregulation.A competitiveness objective risks blurring our mandate at best, and at worst risks having a corrosive effect on decision-making leading to financial stability issues – precisely what happened the last time, not so long ago, we had a secondary mandate to promote the sector.Lastly the evidence doesn’t suggest to me a financial centre struggling for growth – indeed Ireland’s financial sector has seen exceptional growth over the last 10 years.None of this is to say we don’t think a productive and competitive economy and financial sector is important. We do – and indeed competition and innovation, subject to appropriate guardrails, is clearly in the best interests of consumers and the wider economy. But a regulator focusing on the “competitiveness” of the sector is unlikely to end well, with this job better left to others. Indeed the last time the Regulator had such a mandate it did not end well. It was clearly not in the interests of the public, the economy or indeed the country – and in the long run was certainly not in the interests of the sector itself.So how do I think we can and should contribute to competitiveness of our economy? Put simply, by doing our job.By maintaining monetary and financial stability – two key pillars of stable growth.By working to ensure the financial system operates in the best interest of consumers and the wider economy.By delivering robust, clear and predictable regulation, including through considering the costs and benefits of regulatory interventions, as well effective and efficient supervision and a clear, transparent and timely authorisation processes.And by ensuring we discharge all of these in a way that is consistent with  the orderly and proper functioning of financial markets.This is a mandate that I firmly believe is broad, balanced and in the best interests of us all.ComplexityLet me turn now to my third C, namely Complexity – a defining feature of the modern world.Complexity in itself is complex, but let me just cover two aspects now, and we can get into more detail in the discussion. The first is the increasing complexity of the sector and its risk landscape; and secondly what we are doing to reduce regulatory complexity.In terms of the complexity of the sector, we are all grappling with increasingly complex organisations in an increasingly complex world. Geo-economic shifts and rapid digital developments have only served to intensify these challenges.In the face of such complexity it is imperative that banks are resilient and prepared – and are focused on the interconnections and dependencies of your businesses within and without the financial system. In particular I would highlight the importance of operational and cyber resilience. We called this out again in the RSO in February as a key risk and priority and even since then the risk has intensified – with geopolitical tensions as well as the potential deployment of the new generation of AI models making this priority all the more urgent.In the face of this constantly evolving technological and cyber-threat landscape, including related to frontier AI models, firms need a future-proofed strategic response with senior sponsorship and appropriate levels of investment. I would underline three objectives, in this regard:Maintain a clear view of your ICT risks - firms should continuously assess their ICT risk landscape, ensuring that cyber and operational vulnerabilities are identified and addressed in a timely and effective way. Existing known gaps need particularly urgent remediation. Ensure ICT controls evolve with emerging threats – ICT risk management and control frameworks should continuously adapt to an evolving threat landscape, including increasingly sophisticated cyber risks and emerging technologies such as frontier AI. Be prepared to respond and recover – firms need a capability to manage disruption effectively, with robust response and recovery capabilities supported by regular testing.All of these are in line with DORA, and existing expectations – though the potentially accelerating risk landscape makes them all the more important.Finally let me say a few brief words about the complexity of the regulatory framework.I would not like you to take my strong beliefs on Capital and Competitiveness mandates for hubris – in particular, as I have spoken of before, I believe in the importance of humility.21 Rather they reflect the importance of these topics, the data, our lived experience and the current risk landscape. But as regulators I firmly believe we should be open to challenge, accountability, and to review – and that we should listen and we should engage.This is why we have focused on continuous improvement over the last number of years, in terms of our engagement and our processes – including how we regulate, authorise and supervise our financial sector. This is also why we are serious about simplification and have been proactively engaging on it both domestically and internationally.  I have spoken about this on a number of occasions, about the real opportunities – as well as the risks – from the agenda. And following engagement with many stakeholders, including the industry, at the end of last year we set out our ongoing commitment to Regulating and Supervising well. This includes a roadmap for domestic simplification which is a comprehensive multi-year programme of initiatives to deliver further efficiencies and effectiveness across regulation, supervision, gatekeeping and reporting.We do this as we see there is an opportunity to streamline rules and processes without weakening the important protections we have built over the past decade.But as I have said before we cannot simplify so much that we do not capture complex risks. Nor can simplification mean no new rules – or regulation risks falling behind.22In a world of complexity and rapid change, regulation must adapt too – ensuring it remains fit for purpose in a changing world. But while adapting we should ensure new regulations, and the overall framework itself, is as simple as possible – but no simpler!23Conclusion Let me conclude.A competitive, productive economy is crucial for growth and better living standards for our citizens. So too is a well-functioning financial sector.Central banks and regulators play a key role in delivering these aims.Not through promoting growth or competitiveness but by underpinning them through monetary and financial stability – pre-conditions for sustainable growth.Nor through lowering standards, but by ensuring that the financial system is well-regulated, resilient and operating in the best interests of consumers and the wider economy.In this way we serve the public interest by delivering on our mission and mandate, including by Regulating and Supervising well – which means for me robustly, effectively and efficiently. And so as we look to the future and to delivering on our productivity and competitiveness aims –  in an age of challenge, change and complexity – there is an onus on all of us to remember the lessons of the past. Collectively we have worked hard to build up resilience in the system, which is now serving the sector well. We should now focus on maintaining and reinforcing such strength – recognising that resilience and stability are not the enemy of growth; but rather its foundation. Thank you![1] Many thanks to Cian O’Laoide, Paul Dolan, and Sorcha Foster for their help preparing these remarks  and to Vasileios Madouros, Simon Sloan, and Fergal McCann for their helpful comments.[2] See Regulatory and Supervisory Outlook (RSO) 2026[3] See for example The Central Bank’s framework for macroprudential capital [4] For example fiscal and monetary policy interventions, payment moratoria etc, all of which cushioned the macro-financial shock, and which may not be repeatable.[5] IE sample includes Significant Institutions based in Ireland each year, included in EBA sample. [6] See ECB Simplification of the European prudential regulatory, supervisory and reporting framework December 2025[7] Y-o-Y growth as of Q1 2026. Irish credit growth is the sum of loans by Irish banks to households and firms (in Ireland) calculated in year on year terms (based on nominal stock); Euro area credit growth is the sum of loans to households and firms (in the euro area) calculated in year on year terms (based on nominal stock). [8] As of June 2025; 620bps and 480bps respectively. See EBA [9] See for example: Malovaná, S., Hodula, M., Bajzík, J., & Gric, Z. (2024). Bank capital, lending, and regulation: A meta-analysis. Journal of Economic Surveys, 38, 823–851. Accounting for publication bias they find that a 1 percentage point (pp) increase in capital (regulatory) ratio results in around 0.3 pp increase in annual credit growth[10] See for example Gambacorta, L., & Shin, H. S. (2016). Why bank capital matters for monetary policy. BIS Working Papers No 558 In a cross country bank-level study, they find that a 1 percentage point increase in the equity-to total assets ratio is associated with a 4 basis point reduction in the cost of debt financing and with a 0.6 percentage point increase in annual loan growth.[11] While Bank Lending surveys point to a recent tightening of credit standards, perceived risks to the economic outlook and lower risk tolerance of banks were the main contributing factors influencing credit supply. [12] Net percentages are defined as the difference between the sum of the percentages of banks responding “tightened considerably” and “tightened somewhat” and the sum of the percentages of banks responding “eased somewhat” and “eased considerably”. This is weighted by each country’s share of total loans outstanding. Positive net percentages refer to a tightening of credit standards, whilst a positive factor implies that the factor contributed to a tightening of credit standards.[13] See for example Capital requirements: a pillar or a burden for bank competitiveness? ECB Occasional Paper Series No 376 and Do capital requirements and their international differences affect banks‘ profitability? Deutsche Bundesbank Discussion Paper 31/2025[14] Sample as per figure 1[15] See ECB Occasional Paper Series  Understanding the banking sector capital framework in the European Union April 26[16] Central Bank of Ireland staff analysis of Irish Significant Institutions[17] Beyond the big three a broader view of competition in the irish loan market[18] See IFS2020 – a new Strategy for Ireland’s International Financial Services Sector.[19] See Ireland for Finance Strategy 2026-2030 Consultation Paper[20] See Honohan, Patrick, "The Irish Banking Crisis Regulatory and Financial Stability Policy 2003-2008" (2010).[21] See Shocks and shifts – regulation and supervision in a changing world” – Remarks by Deputy Governor Mary-Elizabeth McMunn at the IOB.[22] See Through the cycle – regulation and supervision in an uncertain world - Remarks by Deputy Governor Mary-Elizabeth McMunn to Compliance Institute Annual Conference[23] See also Sharon Donnery ECB As simple as possible, but not simpler September 2025  

Central Bank loan-level research shows the Irish lending market is significantly less concentrated when considering the full diversity of lenders.Robust capital and liquidity positions have served the sector well – with the evidence not supporting a lowering of overall levels of resilience on the basis of bank credit, profitability or international competitiveness. Central Banks best serve these broader objectives related to productivity and growth by delivering on their core mandates, effectively and efficiently.Speaking at the Banking and Payments Federation today (Thursday 7 May 2026) Deputy Governor Mary Elizabeth McMunn set out the Central Bank’s position across three key issues — capital, competition, and complexity - and discussed new research into the lending landscape in Ireland which was also published today.The Deputy Governor spoke of the importance of capital requirements and a safe and sound banking sector, and how, looking at the data, there is little evidence to support calls to reduce bank capital requirements on the basis of boosting lending and competitiveness. Deputy Governor McMunn said: “Keeping the sector strong and resilient is not about resilience for resilience’s sake — but so banks can continue to perform their important functions, through good times and bad. A resilient, well-capitalised banking sector is not just good for consumers: it is good for banks, good for their investors, and good for the economy.”The Central Bank today published new research “Beyond the Big Three: A Broader View of Competition in the Irish Loan Market” drawing on granular loan-level data from the Central Credit Register — the most comprehensive analysis yet of competition in the Irish loan market. The research found that when non-bank lenders, foreign banks, and credit unions are included alongside domestic retail banks, new business lending is 60% less concentrated and concentration in consumer credit falls by more than 80%. Crucially, one-third of Irish firms including 40% of SMEs  borrow from multiple lender types, indicating an active and competitive ecosystem rather than a captive market.The research found that when non-bank lenders, foreign banks, and credit unions are included alongside domestic retail banks, new business lending is 50% less concentrated and concentration in consumer credit falls by around 80%. Crucially, one-third of Irish firms including 40% of SMEs  borrow from multiple lender types, indicating an active and diverse  ecosystem. On proposals to give the Central Bank a competitiveness mandate, the Deputy Governor was unequivocal. Invoking the Honohan Report’s findings on the causes of Ireland’s banking crisis, she warned that the last time the regulator carried such a mandate it contributed directly to the failures that imposed enormous economic and societal costs on the country. Ireland’s financial sector has grown strongly over the past decade — evidence that regulation is not a barrier to growth. Central Banks best serve the economy by delivering on their core objectives, effectively and efficiently.Deputy Governor McMunn said “ The last time the regulator had such a mandate it did not end well — it was not in the interests of the public, the economy, or the country, and in the long run was certainly not in the interest of the sector itself”.”Reaffirming the Central Bank’s commitment to reducing regulatory complexity, the Deputy Governor continued:“Regulators should, however, be open to challenge, accountability and to review – and we should listen and we should engage. This is why we are serious about the simplification, and have set out a comprehensive multi-year domestic simplification programme to deliver further efficiencies and effectiveness across regulation, supervision, gatekeeping and reporting.– ENDS –

I was in Washington for the Spring Meetings of the International Monetary Fund (IMF) two weeks ago and this week I was in Frankfurt at the latest meeting of the ECB Governing Council, to decide interest rates to achieve our price stability target of 2 per cent inflation over the medium term.  I wanted to use this blog to offer some reflections on both meetings. Inevitably the war in the Middle East cast a shadow over both meetings. Uncertainty about the global outlook dominated the discourse: the duration of the conflict, the damage to infrastructure, the impact on supply chains, and, given all of this, the optimal policy response. My colleagues and I are once more looking at scenarios to communicate the breadth of uncertainty and to ensure we stand ready to respond to evolving second round effects that could give rise to more persistent inflation. On top of these developments, two other topics dominated conversations: first the impact of artificial intelligence (AI) on cyber security and operational resilience as well as productivity and employment, and second digital financial innovation. As a highly open and very well-connected economy with a significant financial system, these developments matter to Ireland.The global economy and financial system The IMF’s message was that the global economy faces renewed tests as the war in the Middle East threatens to disrupt growth and disinflation. After withstanding higher trade barriers and greater uncertainty in 2025, global activity now faces a major test from the war in the Middle East. Downside risks dominate the growth outlook. A longer or broader conflict, worsening geopolitical fragmentation, a reassessment of expectations surrounding artificial‑intelligence‑driven productivity, or renewed trade tensions could significantly weaken growth and destabilise financial markets. High public debt levels and eroding institutional credibility further heighten vulnerabilities. At the same time, more rapid productivity gains from AI or a sustained easing of trade tensions could provide a boost for growth. From a financial stability perspective, the IMF called on policymakers to act decisively and bolster resilience. This means being prepared for market dysfunction, ensuring that liquidity and funding facilities are ready accessible and operationally ready. While market functioning has remained orderly, risks are asymmetric and could intensify if the conflict persists. The IMF also emphasised the importance of international cooperation to build resilience, in particular completing the implementation of the Basel framework and avoiding regulatory arbitrage and weakening prudential standards. In the growing non-bank financial intermediation sector, the need to close data gaps, improve cross-jurisdictional data sharing, and enhancing oversight are critical. Strengthening the financial stability lens in the regulation of the non-bank sector has been – and continues to be – a priority for us at the Central Bank of Ireland. We recently published a financial stability assessment of Irish hedge funds and the availability and use of certain types of liquidity management tools (reflecting our position towards effective implementation of internationally agreed standards and strengthened surveillance respectively).Key themes – AI and digital financial innovationDigitalisation was a dominant theme in my conversations. The announcements of the latest AI developments meant that the risk posed by cyber threats and the value of operational resilience kept coming up in discussions.   The implications of rapid advancements in AI capabilities for cyber threats – as well as cyber defences – has been expected for some time. But the pace of change underpins the importance of continued investment by all organisations (not least for financial institutions) in order to safeguard their systems against rapidly evolving threats, as well as their ability to respond to an attack.  On the productivity and employment impacts, the over-arching view was that the effects were potentially large, but likely to be spread over time.  And not surprisingly, digital finance was a key theme, in particular on payments. Discussions with peers and industry covered the rapidly evolving landscape (stablecoins, tokenised deposits, central bank digital currencies) and the implications for public policy outcomes, as well as the cross-border elements and the regulatory approaches by different authorities. This is an area which we are focused on (including via our recent Discussion Paper), reflecting the breadth of our mandate and the need to consider the issue from a consumer, investor, financial stability, and macroeconomic perspective.No change to policy rates this week, but upside risks to inflation and downside risks to growth have intensifiedAnd so to our meeting this week in Frankfurt where we kept its main policy interest rate (the deposit facility rate) unchanged at 2 per cent. The oscillation between a potential resolution to the conflict and an escalation of tensions is driving energy commodity price volatility. Oil prices are fluctuating in a wide range roughly between the baseline from the ECB staff projections in March ($90 peak in Q2 2026, before gradually easing) and the adverse scenario ($119/barrel). The baseline-adverse range for gas prices was a peak of €50-€87/MWh, before falling back. At the time of writing gas spot prices are just below the bottom of this range.Without a clear timeline for the end of the conflict and a reopening of the Straits of Hormuz, combined with a lack of clarity on the extent of infrastructure damage from the war and what this might mean for supply, I am concerned about a higher-for-longer energy price scenario. A point also made by the European Commission and the International Energy Agency. The longer this goes on, the greater potential for higher commodity prices and quantity disruptions to take hold, and not only in energy but across the supply chain. This is reminiscent of the non-linear propagation of supply chain stresses we saw after Covid and the Russian invasion of Ukraine, which can give rise to more persistent inflation. We are already seeing these effects in the prices for energy intensive commodities, with production concentrated in the Gulf region. Since the start of the war, prices for helium, sulphur, and fertilisers have all increased sharply. This is putting upward pressure on downstream producer prices in semiconductor, chemicals, and food production sectors.Of course, pass through from producer prices to consumer prices is not always one-for-one.  It depends on the demand environment that firms are facing. Yesterday’s initial estimate for euro area GDP, which shows growth slowing to just 0.1 per cent in Q1, combined with weaker consumer and business confidence, suggests near-term headwinds to growth.  Having sat around our 2 per cent target for the last year, April’s initial estimate of 3 per cent inflation (year-on-year) for the euro area is driven almost entirely by energy prices, which increased by almost 11 per cent year-on-year in the euro area, and 3 per cent in the month of April alone. Core inflation, which strips out energy and food, was more or less unchanged in April. For Ireland, April’s headline inflation figure was 3.6% (year-on-year), unchanged from March. While the incoming information has been broadly consistent with our previous assessment of the inflation outlook, the upside risks to inflation and the downside risks to growth have intensified. In other words, the longer energy prices remain elevated the greater the risk of more broad-based and persistent inflation, and the more entrenched the drag on growth becomes. We will have a much clearer picture of underlying inflation momentum in the months ahead as more data comes in. We have seen the direct effects of this shock in higher energy prices. Going forward, I will be paying close attention to indirect effects, that is how higher energy prices are contributing to cost-push inflation in production, transportation, and services. Potential second-round effects via wages will take longer to show up, given the staggered nature of wage-setting in Europe. In the meantime, inflation expectations need to be closely monitored for signs of de-anchoring. We are committed to setting monetary policy to ensure that inflation stabilises at our 2 per cent target in the medium term.One reflection One final comment on my trip to Washington. It reaffirmed for me the value of engaging with global institutions to address shared challenges. Operating in a small open economy means we value relationships that support our commitment to multilateralism and international cooperation, collaboration and understanding.Gabriel Makhlouf

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Safeguarding Financial Integrity – Central Bank of Ireland’s Approach to Financial Crime PreventionThank you for the invitation to speak at today’s event. This is an important opportunity for us to engage and share our experiences and approaches to deal with the global challenges and issues we are facing in financial crime. Change, instability, flux, unpredictability - all words that I guarantee you will hear on multiple occasions throughout the day’s events. I will not be any different. We are living in a world where things are changing on a minute by minute basis, with uncertainty being the only thing we can be sure of.  When we look back on this period in the history books, this decade will be characterised as a period of extraordinary change, climate transition, geopolitical tensions, rapid technological transformation and shifting economic conditions.  This instability brings increased risk for those of us working to combat financial crime. A paper published by the World Economic Forum in March1 notes that the shifts in the rules of the global economy are creating opportunities for criminals. Technological transformation is enabling the use of tools that were never meant to support financial crime, facilitating faster, more efficient ways to deceive and break through regulatory controls and systems causing significant harm to the system and to consumers. So, as a risk based regulator, and a horizontal supervisor, our approach is not to focus on whether change will come, but the nature, degree and speed of that change and how we respond collectively. Resilience, adaptability and trustworthiness are the qualities that must define that response. It is in this context that the Central Bank published its annual Regulatory and Supervisory Outlook Report. The report is one-part horizon scan, one-part an outline of the work we are undertaking to deliver on our mandate, and one-part what we expect firms to do in managing or guarding against these risks in the interest of their customers and the wider financial system. Specifically, we have set out our views using three core themes. The first theme is “Macroeconomic and Geopolitical Drivers”, where among other things, we are talking about how rapid digitalisation is leading to new capabilities and benefits for consumers with easy and fast access to financial services, but it is also leading to an increase in the risk of fraud and financial crime. The second theme is “How Firms Respond to Change”, which includes how firms manage operational resilience, including the growing incidence and sophistication of cyberattacks, the risks associated with ever increasing digitalisation and a growing volume and variety of data used by businesses. The third theme is “Longer-Term Structural Forces”, which includes our view of financial crime risks, which we deem as significant to severe. This captures a number of elements, including insider dealing, the provision of unauthorised financial services, terrorist financing, money laundering and fraud and scams, which I’ll return to in a moment. I would encourage anybody here who has not yet read the Regulatory and Supervisory Outlook Report to do so. It gives a clear sense of our regulatory and supervisory priorities, the priority risks we believe firms need to focus on, and our expectations in relation to them.Financial Crime RisksIn relation to the Central Bank’s views and expectations on financial crime specifically, we regulate and supervise the financial system to identify financial crime risks and ensure that firms take necessary and appropriate action to mitigate those risks. This incorporates the risks of money laundering, terrorist financing, financial sanctions evasion, fraud and market abuse. By doing this we work to achieve one of our four identified safeguarding outcomes – the integrity of the financial system. We sometimes refer to the “plumbing” of the financial system. Financial crime is like acid gushing through the pipes – deeply corrosive, dangerous and, at volume, capable of doing immense damage. There is the direct impact on the victims of this crime – and a wider, cumulative impact on trust in the system. The speed of this impact is increasingly supported by technology. As Europol notes, “emerging technologies, such as artificial intelligence, accelerate crime and provide criminal networks with entirely new capabilities. These innovations expand the speed, scale, and sophistication of organised crime, creating an even more complex and rapidly evolving threat landscape…”.2Ireland’s latest National Risk Assessment, which is nearing completion, will also give us a comprehensive overview of the current nature and scale of the money laundering and terrorist financing threat. We know that responding to these risks is a collective task - at global, European and national level. It is a systemic challenge that requires a coordinated and agile response from law enforcement, regulators, financial institutions and technology companies. For our part in the Central Bank, we are addressing these challenges in an integrated, holistic way, through our integrated approach to supervision. We also continue to work and coordinate efforts with peer supervisors and international authorities and groups. We form part of, and help to shape, the national and international AML frameworks – including, at European level, through AMLA. Delivering our mandate to combat financial crimeI’ll now touch upon our work in two of those areas specifically – anti-money laundering and combatting fraud. Money Laundering & Terrorist FinancingThe Irish financial sector is large and diverse. We implement a risk-based approach to supervising money laundering and terrorist financing risks, with the level of supervisory engagement based on the risk profile of individual firms and sectors. Unsurprisingly, the banking, payments and e-money sectors remain a priority focus for supervision, given they are inherently high risk from a money laundering/terrorist financing (ML/TF) perspective. We will also continue to closely supervise the investment fund sector given the nature and size of this industry in Ireland.The banking sector’s AML/CFT frameworks are generally mature and well embedded due to the efforts made over the past decade. Given the important role banks play in combatting “dirty money” entering the financial system, they need to be particularly vigilant and responsive to criminals exploiting new technologies and practices to abuse the system, and firms within it. Improvement is also needed by firms in ensuring that that AML/CFT frameworks keep pace with changes, and that they continue to be relevant for the risks faced, particularly with the emergence of new digital banking business models. Boards and senior management in banks must be able to demonstrate an understanding of their key money laundering and terrorist financing risks and maintain risk management and control frameworks in line with national and European requirements, including those of AMLA. In the payment and e-money sector, while some firms have taken positive steps to strengthen their AML/CFT risk management and control frameworks, much deeper work is required across the sector in this area. Firms’ governance arrangements, systems and controls, including reporting mechanisms, need to be effective and proportionate to the nature, scale and complexity of their business, and the risks to which they are exposed.A key concern is these firms’ inadequate understanding of ML/TF risks and the need for adequate mitigating measures commensurate with the risks. This is particularly true of newer, emerging firms. For the investment fund sector, financial crime continues to require attention. Funds can be exploited for money laundering and terrorist financing, with the funds sector in Ireland being the subject of international scrutiny from an AML/CFT perspective given its size and reach. It is a key area of focus for the Central Bank and in 2026 we will be undertaking a thematic review of suspicious transaction report (STR) reporting in the sector. Inadequate monitoring of these risks exposes the sector to potential abuse, including breaches of financial sanctions. In the area of crypto, the opaque and rapidly evolving nature of the market structures in the crypto-asset sector can make detection and tracing of the ML/TF activities particularly challenging. We expect firms to maintain effective AML and fraud-prevention controls to mitigate financial crime risks, and this will be a key element of our supervisory focus in 2026.Among our supervisory tools, we will use targeted inspections to assess whether firms are meeting their obligations and legal requirements. We will also be assessing how firms understand their ML/TF exposures, and whether their control frameworks are proportionate to those risks.Across all key sectors, our enhanced Risk Evaluation Questionnaire (REQ) will be a critical tool in identifying firm-level, sectoral and cross-sectoral risk. These will capture detailed quantitative and qualitative information on ML/TF risks and on the quality of firms' controls. This data will help us identify emerging threats, guide our supervisory strategy, and support the work of AMLA. We will continue to roll out the REQ to all sectors over the course of the year. Fraud & ScamsFraud and scams is the element of financial crime that is the most visible to all of us as consumers and users of financial services. Its near constant presence is highlighted in the OECD Consumer Finance Risk Monitor 20263 which notes 85% of jurisdictions now report that financial scams and frauds are a top risk facing consumers. In Ireland total payment fraud reached €160m in 2024, with losses as a result reaching €66m.4New research published by the Central Bank finds that of 3000 people surveyed, more than one in three respondents reported experiencing fraud, and almost two thirds of those who experienced fraud lost money as a result. The research shows that we must work faster and harder to combat fraud – based on a whole of system approach to improve public awareness and education, while also strengthening digital and financial system safeguards. We know that combatting frauds and scams, and the negative impact on consumers, requires collaboration between financial services firms, technology companies, regulators and law enforcement. For our part the Central Bank has identified financial crime as one of our three areas of focus for consumer and investor protection.5 We expect this should also be a priority for all firms and agencies involved with financial services. Our new Consumer Protection Code includes explicit requirements on firms to take steps to protect consumers against frauds and scams and that where they occur, consumers are supported. We are continuing our work to identify unauthorised providers of financial services, and to use our Trusted Flagger status to require the removal of criminal content online. We will also continue our work to raise consumer and investors’ awareness of how to protect themselves against frauds and scams through ongoing awareness campaigns. In the area of supervision, we are undertaking a major cross-sectoral thematic review, focused on fraud controls in a number of sectors. As part of this review, we will also be examining firms’ treatment of customers who fall victim to fraud - and we reiterate that firms must meet their liability obligations when customers fall victim to fraud.Across all areas of financial crime, we expect firms to: Understand your risks; Invest in and enhance controls;Report suspicious activity promptly and effectively; Treat fraud victims fairly; and Embrace technology with care, managing the risks to consumers and investors. Conclusion What I have discussed today is a high level overview of the risks and challenges that we are dealing with in combatting financial crime. At the Central Bank, we will continue to implement our risk-based model of supervision, focusing on the highest risk sectors and seeking to ensure that firms are evolving their risk management frameworks to keep pace with emerging threats and mitigating the impact on their customers. Understanding the need for a collective approach we will also continue to prioritise our engagement with international agencies, domestic organisations, regulated firms and the wider industry to understand emerging trends and risks and work together to raise standards. And finally we will continue to be proactive in communicating our expectations to the firms we regulate recognising the first principle that regulated firms are responsible for identifying the financial crime to which they are exposed - and taking appropriate measures to mitigate those risks for the benefit of their customers.  [1] A paper published by the World Economic Forum in March[2] The changing DNA of serious and organised crime The changing DNA of serious and organised crime[3] Consumer Finance Risk Monitor 2026[4] Central Bank of Ireland (2025). Payment fraud statistics. [5] "Towards Our Future Financial Wellbeing" - Speech by Deputy Governor Colm Kincaid at Financial Services Ireland

Good morning.Brendan, thank you for the warm introduction. It is a pleasure to join you at the ILCU Internal Audit Services Conference. I also want to thank Barry Harrington for the invitation to address you here today.1When I addressed the ILCU Annual Conference last April, I spoke about a time of transformative change for credit unions, a period that would bring both significant opportunities and important challenges.2One year on, we can see that transformation taking shape. A revised and simplified lending framework is now in effect providing credit unions with expanded capacity to serve members. Assets and lending continue to grow. Reserves remain strong. The sector is consolidating and evolving, with positive momentum evident across several key metrics.Yet the risks that were highlighted then have not gone away. In fact, in some areas, particularly the external macro-environment and operational resilience, they have intensified.  Peter Drucker once observed that “the greatest danger in times of turbulence is not the turbulence, it is to act with yesterday's logic”. That is why today I want to focus on the theme of vigilance and resilience, how we protect and enhance the progress that has been made and fulfil the Bank’s vision of “strong credit unions in safe hands”.But before I outline what I want to cover today, let me say something about how we approach our work with the credit union sector. The Central Bank is committed to being open and engaged with those we regulate and supervise. This approach supports us in our work and to effectively deliver outcomes-focused regulation and supervision.3 Earlier this year, the Registry of Credit Unions published a Credit Union Engagement Charter, setting out the principles that guide our interactions with the sector.4 Our commitment remains clear: our engagement will be open, robust, constructive, and transparent. In this engagement, the Bank will focus on the most material risks, recognising that our shared objective is strong credit unions serving members effectively over the long term.My remarks today will address three areas:First, the risk environment - the uncertainties and transformations facing the financial system, what they mean for credit unions, and our supervisory priorities as shaped by these emerging risks.Second, sustainable growth - balancing ambition with prudence, exploring collaborative models, and continuing our simplification efforts.And third, operational resilience — particularly the findings from our IT Thematic Review and the actions required.Risk EnvironmentAs we gather today, it is important to place our discussion within the broader risk environment facing the Irish financial system. The Central Bank’s most recent Financial Stability Review5, Q1 2026 Quarterly Bulletin6 and the Regulatory & Supervisory Outlook 20267 paint a consistent picture.The global backdrop remains one of heightened uncertainty. Geoeconomic fragmentation, geopolitical tensions and stretched valuations in some financial markets continue to pose risks. Domestically, the Quarterly Bulletin notes that a renewed surge in international energy prices is testing economic resilience, with inflation projections revised higher for 2026 and modified domestic demand growth expected to moderate. Operational and cyber risks are assessed as remaining very high, while risks related to data, models and artificial intelligence have increased. Asset valuation and market risks have also risen relative to last year.This rapidly evolving environment is further shaped by accelerated technological change, including the increasing use of artificial intelligence. Developments in instant payments, tokenisation and the ongoing preparations for the Digital Euro form part of the technology-driven transformations highlighted in the Outlook. A Digital Euro would aim to complement existing payment options and cash, providing greater choice while preserving the stabilising role of public money and maintaining trust in the financial system. The Savings and Investments Union initiative is also seeking to better channel savings into productive investments across Europe, an endeavour which will require the sustained efforts of multiple stakeholders8, and that includes a role for credit unions. For the sector, these wide-ranging changes underscore the importance of forward-looking strategic planning and robust operational resilience.While the overall financial system, including credit unions, has demonstrated resilience through recent turbulence, there is no room for complacency. Risks that once seemed remote are now more probable, and the pace of technological and geopolitical change demands sustained vigilance.Supervisory PrioritiesAgainst this setting, the Regulatory & Supervisory Outlook 2026 sets out five supervisory overarching priorities for the Central Bank: Priority 1: Maintaining and building resilience to geopolitical risks and macro-financial uncertainties involving work on operational resilience, cyber security and financial resilience in the face of a volatile macro-environment and how firms are embedding climate and environmental factors into risk management, business models and governance.Priority 2: Securing consumer and investor interests in a rapidly changing world with a particular focus on a) how firms operate and the customer experience, b) digitalisation, including balancing the benefits of innovation with risks of harm to consumers, and c) financial crime, with rising risks to consumers from frauds and scams.Priority 3: Responding to technology-driven transformations with a focus on the expanding use of AI, digital money and tokenisation, including our regulation and supervision of the use of these technologies and innovations, and the implications of these changes for firms and the financial system.Priority 4: Helping to address the environmental and societal transitions underway. Given the impact of these longer-term structural transitions, we will continue to work in partnership with other stakeholders to help address them. This includes work on protection gaps, retail investment participation, the evolving payments landscape and sustainable finance.Priority 5: Enhancing how we regulate and supervise with a continued focus on evolving our supervisory approach to ensure its continuing effectiveness, improvements to gatekeeping and the roadmap for delivering on simplification as set out in our recent "Regulating and Supervising Well" publication.9A central theme that runs throughout these five priorities is transformation and change, with a need for all participants in the financial ecosystem to adapt to the risks and impact of this change. For the credit union sector specifically, the Outlook highlights that recent legislative and regulatory changes are facilitating growth and diversification. This growth must be matched by a corresponding maturation in operational, organisational and risk management capabilities. Supervisory focus in 2026 will therefore centre on financial resilience (including reserves and liquidity), the development of a coordinated approach to sustainable growth, managing operational risk and continued strengthening of governance and culture within credit unions.Continued Growth and ResilienceLooking at the sector today, Irish credit unions continue to maintain financial resilience while playing an important role in the provision of financial services. With close to 3.6 million reported members and total assets of approximately €22.5 billion at the end of September 2025, credit unions remain deeply embedded in communities across the island.The latest Financial Conditions of Credit Unions Report10 shows positive indicators: assets grew by 5%, member savings rose by 5% to €18.7 billion, and gross loans outstanding increased by 8% to €7.7 billion. Mortgage lending continues to expand, with the house loan book now approaching €900 million, and new lending issued during the year reached €3.3 billion. Arrears levels remain low and capital reserves are robust, with average realised reserves at 16.8%, well above the regulatory minimum.These outcomes are encouraging. They reflect a stable sector that is responding to member needs for affordable home finance, support for small businesses and everyday lending. At the same time, it is important to recognise that this resilience is not static and challenges remain; for example, a central purpose for a credit union is to provide credit to its members. A sectoral loan-to-asset ratio of 34% shows a sustained imbalance between the savings accepted and loans provided. This metric highlights the importance of ongoing focus on strategic planning and business model sustainability.Robust Resilience Through Strong Regulation and SupervisionThe credit union sector's resilience today did not come about by chance; it reflects prudent, deliberate choices, and sustained effort. This strength has been built upon three mutually reinforcing pillars:A robust and prudent regulatory framework, which alongside the maturity of the sector has become more proportionate, more enabling, and more focused on outcomes, creating space for credit unions to grow while maintaining appropriate safeguards;A supervisory approach that is risk-based, forward-looking, and increasingly integrated that identifies issues early and drives remediation; andThe commitment of credit union boards, management, and staff, including internal audit personnel, to improving standards of governance and risk management.Taken together, these elements have supported the sector’s development to date. In the current environment, it is important that this balance is maintained. While the Bank is supportive of efforts to reduce unnecessary costs and complexity within regulation and supervision, streamlining where appropriate, such changes must not come at the expense of the resilience and protections that underpin member trust.10Balancing Growth Ambition with Prudent StandardsMany credit unions rightly seek to grow their lending and broaden services to members. That ambition aligns with the sector’s purpose, but it must be pursued prudently and sustainably.The expanded lending framework is enabling, not a green light for unchecked volume growth. Boards and management must ensure that growth in mortgages or business lending is underpinned by robust credit assessment, thorough affordability analysis, sound risk pricing and appropriate limits on concentrations. Growth that outpaces risk management capability would undermine the trust that is the sector’s greatest asset.Internal audit plays an essential role by independently testing whether a credit union’s lending frameworks are operating effectively, whether exceptions are properly controlled, and whether emerging risks are identified and escalated promptly. This scrutiny helps ensure that expansion serves members over the long term rather than exposing their savings to unnecessary risk.Collaboration Through CUSOs and Corporate StructuresOne area of particular interest in supporting sustainable growth is greater collaboration across the sector through credit union service organisations (CUSOs) and, in time, corporate credit unions.The Bank has noted with interest recent initiatives, including the establishment of a CUSO aimed at developing centralised treasury functions, improving asset and liability management, and enabling greater scale in mortgage and business lending. Such collaborative structures have the potential to deliver real benefits with enhanced efficiency, better risk diversification, access to specialised expertise, and stronger support for member services while preserving the local, community-focused nature of individual credit unions.However, as with any expansion or new arrangement, these developments must be approached with the same rigour and prudence that has underpinned the sector’s resilience to date. Effective governance, clear risk appetite frameworks, robust oversight of shared services, and careful management of inter-dependencies will be essential. The Central Bank will progress the development of an appropriate regulatory framework for shared service organisations during 2026, alongside the advancement of policy work on corporate credit unions. We look forward to continued engagement with the sector on these important initiatives.Simplification and EnablementAs I mentioned earlier, the Bank is also delivering tangible simplification for the sector. Last year’s review of the Credit Union Lending Framework has enabled safe growth in house and business lending, with a simplified approach that included the removal of tiered limits, while maintaining appropriate guardrails. For 2026, we will continue to update the Credit Union Handbook and related guidance to maintain clarity and streamline processes so that they are consistent with evolving prudential expectations, reflecting a tailored and proportionate approach to regulation and supervision of credit unions.This work, set out in our December 2025 roadmap for a more effective and efficient regulatory framework, continues our proportionate and tailored approach. It sits alongside our ongoing work to extend the full Consumer Protection Code to all regulated activities of credit unions so that members are afforded the same level of protection as all other financial service consumers. IT and Operational Resilience – Implementing the Lessons from the Thematic ReviewOperational resilience remains a priority area, particularly given the high level of operational and cyber risks highlighted in the 2026 Regulatory & Supervisory Outlook.In 2025, the Bank completed an IT Thematic Review of IT Risk Management across the credit union sector. This review assessed IT risk management, internal controls and governance. Communications were issued to all credit unions with details of the Thematic’s findings and expected follow-up actions.These findings, and the Bank’s focus on Operational Risk, will also not come as a surprise to today’s attendees. The Institute of Internal Auditors, which represents 260,000 professionals worldwide, published its ‘2026: Risk in Focus’ survey results that identified business resilience, digital disruption and AI as the three key risks faced by organisations worldwide.Credit unions are expected to address the relevant identified gaps and demonstrate effective remediation by early 2027. The findings align closely with some of the requirements of the Digital Operational Resilience Act (DORA), which will apply to credit unions from January 2028. Early remediation will form part of the necessary preparations for a credit union before DORA takes effect. Boards hold ultimate responsibility for IT risk and resilience. Senior management must drive the necessary investment in people, processes and technology. Improved operational resilience will be an ongoing journey. The Bank will continue to engage constructively with the sector on this journey. The quality and pace of remediation of issues identified in the IT Risk Thematic will be a key focus of our supervisory engagement in 2026 and beyond.Other Areas of FocusOur supervisory area of focus for credit unions in 2026 remain aligned with the broader Outlook: prudent implementation of the expanded lending framework, effective asset and liability management (particularly as loan books lengthen), robust governance including succession planning, and overall financial and operational resilience. More broadly, the Bank will also continue to advance its work on policy formulation and providing support to the on-going voluntary restructuring within the sector.Today’s conference agenda touches upon and directly supports a number of these priorities, and I encourage you to draw practical, actionable insights from your discussions, and to consider how those insights can strengthen assurance work back in your own credit unions.Conclusion – Shared Commitment to Enduring ResilienceThe credit union model, member-owned, community-rooted and not-for-profit, has enduring strengths. Those strengths are best protected when regulation, supervision and internal governance work together towards safe, stable and well-managed entities that serve members effectively.It is imperative to guard against any temptation towards complacency. The resilience the sector enjoys today is the direct result of a stronger regulatory regime, an enhanced supervisory approach and the improving efforts of credit unions themselves. Maintaining that resilience requires ongoing vigilance, disciplined risk management and an unwavering focus on member outcomes.Regulation and supervision are not barriers to progress; they are the foundation that sustains public confidence and allows the sector to thrive over the long term. Our shared objective is clear: credit unions that are resilient, well-governed and positioned to meet the needs of members and communities for many years to come.Lastly, to everyone working in internal audit, risk and compliance roles - the Central Bank acknowledges the demanding but vital work you undertake. Effective operation of these functions provides the independent assurance and challenge that supports boards and management in protecting member funds and ensuring the sector remains safe, stable and focused on its members.Thank you for your attention. I wish you a productive and insightful conference. [1] Many thanks to Marcus Sweeney and Eamon Clarke for their help preparing these remarks, and to Cian O’Laoide for his helpful comments.[2] A time of transformative change – opportunity and challenge for credit unions - Remarks by Director of Banking and Payments Domhnall Cullinan at ILCU Annual Conference April 2025[3] Regulating with purpose – outcomes-focused regulation and supervision, a practitioner’s perspective - Remarks by Deputy Governor McMunn at Outcomes-focused Regulation in Financial Services conference, University College Dublin (UCD) March 2026[4] Central Bank of Ireland Registry of Credit Unions Credit Union Engagement Charter January 2026[5] Central Bank of Ireland Financial Stability Review 2025 II[6] Central Bank of Ireland Quarterly Bulletin Q1 of 2026[7] Central Bank of Ireland Regulatory and Supervisory Outlook 2026 February 2026[8] Opening Remarks by Governor Gabriel Makhlouf for the Savings and Investment Forum March 2026[9] Central Bank of Ireland Regulating & Supervising well – a more effective and efficient framework December 2025[10] Central Bank of Ireland Financial Conditions of Credit Unions, 2025 April 2026[11] Through the cycle – regulation and supervision in an uncertain world - Remarks by Deputy Governor Mary-Elizabeth McMunn to Compliance Institute Annual Conference October 2025 

More than one in three Irish adults (35%) have experienced fraud or scams.38% of fraud victims never reported their experience to their financial service provider or any authority.Research identified risky online behaviours as the single strongest predictor of fraud experience—more influential than age, income, or education level.Fraud victims are far more likely to recover monies when the fraud is reported. Fraud literacy reduces predicted fraud exposureCentral Bank of Ireland of Ireland has today (Tuesday 28 April 2026) published a report highlighting that more than one in three Irish adults (35%) have experienced fraud or scams, with nearly two-thirds of victims suffering financial losses. The findings were based on a nationally representative survey of almost 3,000 adults, providing one of the most comprehensive pictures to date of fraud incidence and its impact on Irish consumers.While total reported payment fraud in Ireland reached €160 million in 2024, a 24.5% increase from 2023, the new research suggests the true impact on consumers may be significantly underestimated. Concerningly, a striking 38% of fraud victims never reported their experience to their financial service provider or any authority.The research found that online purchase scams were the most common with 48% of victims being impacted, followed by debit and credit card fraud (34%). Other prevalent scams included delivery service impersonation (15%) and phishing or email scams (13%).While most victims lost relatively modest amounts, with 39% losing less than €249, the research identified investment fraud as a particular concern. Despite it impacting 7% of respondents, investment fraud victims typically lose more substantial amounts.The study reveals a clear correlation between reporting fraud and recovering lost funds.Among victims who reported fraud to their bank, An Garda Síochána or another relevant authority, 57% were able to recover their money. By contrast, only 13% of those who didn't report the fraud recovered their funds.In a significant finding, the research identified risky online behaviours as the single strongest predictor of fraud experience—more influential than age, income, or education level. These behaviours include:Making purchases from unfamiliar websitesSharing banking or payment card details through insecure channels like email or messaging appsSending money to people met online but never in personResponding to unsolicited messages offering discounts or promotionsFailing to use multi-factor authentication for online paymentsMaking frequent high-value purchases onlineWhile general financial literacy—understanding concepts like interest rates and inflation—showed no protective effect against fraud, fraud-specific literacy did make a significant difference. Fraud literacy - being able to identify warning signs and fraudulent cues in realistic scenarios- was associated with lower fraud experience.Deputy Governor Kincaid commented on the report, “Financial frauds and scams continue to be a key area of concern for the Central Bank of Ireland, as it is for regulators and law enforcement agencies all over the world. The research we are publishing today will help the Central Bank, other authorities and financial service providers to combat fraud and develop better frameworks to deal with this growing problem we face together. The research also shows that you can make it harder for the fraudsters by taking steps in your online behaviour and it is important that if you do fall victim to fraud you report it. Reporting to your financial service provider makes it more likely your money can be recovered and where you did not specifically authorise the payment transaction you have a statutory right to a refund, subject to limited exceptions. By reporting, you may also help others by making your financial service provider aware of the fraud.Of course, it is equally important that where people do report fraud their financial service provider is there to support them, and the Central Bank has work underway with the firms we regulate to improve customer service for fraud cases.”More informationÚna Quinn una.quinn@centralbank.ie / 086 067 4008media@centralbank.ie

Irish Term Deposits - Central Bank of Ireland Issues Warning on Unauthorised Firm