The Central Bank has warned that global risks to the Irish financial system arising from the Middle East conflict, artificial intelligence (AI), and cyber attacks have intensified.<\/p>\n
In its latest Financial Stability Review, the financial regulator highlights several economic threats, led by a “persistent global energy supply shock triggered by the conflict in the Middle East”.<\/p>\n
According to the review, if that situation “intensifies or continues for longer, it will push up inflation, slow economic growth and increase costs for Irish households and businesses”.<\/p>\n
It also notes that Ireland’s dependence on imported energy and international trade means the country is “particularly exposed” to global developments.<\/p>\n
Meanwhile, the Central Bank says valuations in the AI sector have “reached high levels”, noting an “increasing amount of investment in the sector funded by debt”.<\/p>\n
So far for 2026, the level of debt finance for AI is already higher than any previous full year.<\/p>\n
The regulator warns that any reassessment of the sector could have “wider economic effects”.<\/p>\n
The review says that rapid developments in AI also raise concerns over the facilitation of cyber attacks.<\/p>\n
Despite the increasing risks, the assessment from the Central Bank says Ireland’s financial system is “starting from a position of strength, but that resilience must be protected”.<\/p>\n
It also notes that Government finances “remain strong, but there are underlying vulnerabilities” – including that budget surpluses “depend on corporation tax revenues”.<\/p>\n
Without this revenue, the Central Bank says the budget balance is “projected to remain in deficit, leaving the State exposed if the global economy weakens or multinational activity is affected”.<\/p>\n
Central Bank Governor Gabriel Makhlouf said the worsening geo-political situation is the risk he is most concerned about, because “we have no control over it”.<\/p>\n
Mr Makhlouf added that “while we start from a strong position, today’s report shows Ireland faces intensified risks from the global environment.<\/p>\n
“These include the energy shock, high valuations vulnerable to adjustment, and cyber and AI threats.”<\/p>\n
The Governor said “preserving resilience is so critical right now,” which includes strong capital buffers in banks, prudent lending standards, and robust operational defences.<\/p>\n","protected":false},"excerpt":{"rendered":"The Central Bank has warned that global risks to the Irish financial system arising from the Middle East…\n","protected":false},"author":2,"featured_media":606680,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-606679","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/606679","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=606679"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/606679\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/606680"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=606679"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=606679"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=606679"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}