Supervisory priorities address geoeconomic shifts and technological risks
The Central Bank of Ireland has published its Regulatory & Supervisory Outlook 2026, detailing its assessment of the financial sector's risk landscape. The report outlines the supervisory work planned in response to geoeconomic shifts and accelerating technological changes.
Geoeconomic shifts heighten operational risks
The Central Bank's assessment highlights that operational risks remain very high for the financial sector, driven by current geopolitical tensions, advancing digitalisation, and increasingly complex operating models.
Asset valuation and market risks have also increased relative to the previous year, as have the risks associated with data, models, and artificial intelligence.
Conversely, inflation and interest rate risks have abated for the financial sector, reflecting both the evolution of monetary policy in the euro area and the sector's enhanced preparedness.
This risk environment, coupled with international responsibilities, forms the basis for the Central Bank's integrated supervisory approach and its regulatory priorities for the period ahead.
The report underscores the need for continuous vigilance against these evolving threats.
Makhlouf stresses resilience and adaptability
Governor Makhlouf emphasized that geoeconomic shifts and accelerating technological change are reshaping the financial system and its risk landscape.
He noted that these developments introduce vulnerabilities, making previously remote risks more likely.
Makhlouf stated, "Resilience, adaptability and trustworthiness are the qualities that must define that response.
" Operational and cyber risks remain a key concern, necessitating a significant focus on operational resilience.
Protecting consumer interests in a rapidly changing world and firms' responses to technological advancements are also central priorities.
The Central Bank aims to enhance the efficiency and effectiveness of its regulation and supervision.
A familiar, yet critical, outlook
The Central Bank's third annual outlook reiterates known risks, underscoring the persistent challenges of geoeconomic fragmentation and rapid technological change.
While the report offers a comprehensive overview, it primarily reinforces existing supervisory priorities rather than introducing novel approaches.
Its value lies in the consistent emphasis on resilience and adaptability, providing a stable framework for firms in an uncertain environment.