Introduction Good morning and thank you to Michael for inviting me to speak at the Compliance Institute’s Annual General Meeting. It is always a real pleasure to engage with compliance professionals.At the Central Bank, we recognise the essential role played by the compliance community in ensuring that financial firms are well-run and contributing to a financial system that is trusted and resilient.We also recognise the important role played by the compliance institute, equipping those working in compliance with the necessary competence and skills to undertake their roles in a professional manner. We also appreciate the collaborative ethos that you instil and the constructive two-way engagement that you support.The Central Bank serves the public interest by maintaining monetary and financial stability while ensuring that the financial system operates in the best interests of consumers and the wider economy. For us, delivering on our four safeguarding outcomes, the protection of consumer and investor interests, the integrity of the financial system, the safety and soundness of firms, and financial stability, guides all our work.The Central Bank is a risk-based, outcome-focused regulator and we constantly challenge ourselves to ensure that we can continue on our journey to ever more effectively deliver in a changing world. Regulators and compliance professionals have significant common ground in this regard:The compliance function plays a hugely important role in linking the regulatory framework to the culture, approach and decision making of their firms;Technology continues to transform how businesses operate, and compliance professionals must support firms to navigate this evolution, staying within the guardrails set by financial regulation;Compliance can apply a risk-based approach to its monitoring activities, that fully considers the business model of the firm, thus ensuring that efforts are directed towards those areas that pose the greatest potential risks to consumers or investors, to market integrity or to safety and soundness.Done well, both regulation and compliance support businesses to be well run and sustainably successful over the medium and longer term. My remarks today will address a number of important topics of relevance to compliance professionals and regulators: The important objective of securing customers’ interests;Individual accountability;Simplification;Resilience;Leveraging technology; and The Central Bank’s evolving approach to supervision.Together these aspects represent critical components in a system of regulation that is seeking to become more outcomes focused, more straightforward, and more effectively supportive of the economy and the financial wellbeing of citizens.We expect that, as compliance professionals, you will be at the heart of your firm’s engagement with these important topics.  Securing customers’ interestsA regulatory and supervisory framework focused on delivering good outcomes is essential to ensuring the financial system is operating in the best interest of consumers and the wider economyThe Central Bank’s Consumer Protection Code is the cornerstone of consumer protection in financial services in Ireland. The recent review of the Code was a significant initiative for the Central Bank. The revised Code will come into force in March this year.Our review of the Code included extensive engagement with industry, with other organisations and with individuals. I want to thank the Compliance Institute and its members for your valuable contribution to that process. Over the last 10 months since the publication of the revised Code we have continued that engagement, which has included cross-sectoral and sector specific workshops and meetings on some of the key themes of the Code. Topics have included informing customers effectively, supporting customers in vulnerable circumstances,1 digitalisation, data protection requirements, etc. Through that engagement and the queries that have arisen on particular aspects of the Code, we have recognised that in some instances we needed to provide further clarification or guidance. To that end, in December, we updated our General Code Guidance and also published a number of FAQs to support industry in implementing the revised Code.  We recognise the commitment that we have seen across firms in the sectors that we regulate to ensure readiness to implement the revised Code from 24 March 2026. And we want to see this effort continue as the revised Code is further embedded and as firms apply its provisions on an ongoing basis in their operations. With that in mind, I want to call out the new Standards for Business which are now being introduced. There are nine of these Standards. They bring together in one place a clear high-level statement of the overall regulatory expectation of firms. They are of course essential material for the compliance community to fully engage with, internalise and help give effect to within their firmsOne of these Standards for Business is that a regulated entity shall at all times secure its customers’ interests.  This standard is designed to ensure that good outcomes for customers is always the driver of firms’ business models and decision-making. (And for clarity, “customers” is explicitly stated to include potential customers.)In a previous engagement with members of the Compliance Institute, I discussed some key aspects of the Securing Customers’ Interests requirement.2 There I noted that, amongst the important aspects of this new articulation of firms’ consumer obligations, is that the “how” is as important as the “what”—it is not enough to comply with the process, there needs to be a clear focus on the outcome. If a disclosure is being made for example, it needs to be done in a way that is effective in really supporting customer understanding. I also noted that the new standard ensures that where firms are faced with new or complex situations or decisions “the obligation to secure their customers’ interests provides a robust and helpful reference point by which firms can orient themselves”.As compliance professionals you play an essential role in assessing the impact of the Standards for Business on your firms’ current activities, as well as confirming on an ongoing basis that new products and procedures are aligned with them. Ensuring that these standards are embedded across financial services firms is hugely important to support trust and confidence in the financial system, and ultimately the achievement of good outcomes for consumers of financial services. Individual Accountability When we introduced the Individual Accountability Framework (IAF) 18 months ago, we said that it would be underpinned by proportionality and reasonable expectations; that it was fundamentally about supporting good governance and well run financial firms - and not about more enforcement in itself; and that it was not something that would be the focus of compliance supervision but rather something that would support the further maturing of our supervisory approach and the delivery of regulatory outcomes.While we are still in the relatively early stages of the implementation of the IAF framework, we are already seeing the positive effects that it is having. These include:Enhanced clarity as to who is responsible for what within financial firms;Support for the effectiveness of collective and individual decision making within firms;Providing an underpinning of responsibilities and accountability which is supporting our new approach to supervision (see below) and its ongoing evolution;Contributing to a context where the improvement and simplification of other areas of regulation can be envisaged - for example in the area of our fitness and probity framework.For compliance professionals, the introduction of the Individual Accountability Framework has been a significant development. Representing a change in how regulatory outcomes are delivered by financial firms, with more responsibility and more expectation accruing to firms and in particular their senior leadership, it means that the role of the compliance function should be evolving to respond to those changes. It means that an enhanced focus on outcomes and on judgement in support of senior management and the firm as a whole should be increasingly at the heart of what the compliance function does. And this of course is consistent both with the Securing Customers’ Interests duty discussed above and with the overall simplification approach which is designed to be less detailed rules-focused and more outcomes focused. Significant engagement with stakeholders was a hallmark of the development of the Individual Accountability Framework. This engagement was very valuable. It is important that it continues and we very much welcome the ongoing views and perspectives of the Compliance Institute and its members, as well as stakeholders more generally, on this issue as we continue with its implementation. Simplification An outcomes-focused approach is also an essential ingredient in engagement with the simplification agenda. Given the productivity and innovation challenges identified in the Draghi and Letta reports, policymakers are placing a renewed focus on the productivity and resilience of our economy. And one aspect of that is simplification of regulatory frameworks. This is not about regulatory standards having been set too high or expectations being too great. It is however a recognition that the proliferation of too many detailed or overlapping rules can have the opposite effect to what is intended. Rather than bringing about better outcomes, too many detailed rules can lead to an undue focus on the rules themselves. Rather than demanding judgement and responsibility from economic actors, too many detailed rules can lead them to see rule compliance as an end in itself. It can result in a perception that the elimination of risk is the ultimate outcome, rather than a sustainably successful economy and the financial wellbeing of citizens.For the Central Bank, this entails an openness to reviewing and considering existing frameworks to assess whether the same outcomes can be delivered in different, and simpler, ways. Achieving robust and high-quality regulation and supervision means being both effective and efficient. We see the drive for simplification as an opportunity to remove unnecessary complexity and undue burden without compromising the resilience and the consumer and other protections that have been established over the years since the global financial crisis. In addition to being engaged on this topic at European level, we are also proactively considering simplification in the domestic context.  Our recent publication “Regulating & Supervising well – a more effective and efficient framework”3 explains how we think about simplification. It also provides an overview of European initiatives to simplify and enhance the regulatory and supervisory framework in financial services, and sets out a domestic programme spanning supervision, regulation, gatekeeping, and reporting.Simplification is an important topic for compliance professionals, you understand the purpose of regulation and have first-hand experience of the businesses that you operate within and where the compliance burden is most significant. You are well placed to identify possibilities for simplification that can meaningfully reduce burden while not compromising on the important outcomes that financial regulation and supervision are designed to achieve. While we may not always agree with you, we very much welcome your engagement on this important topic.ResilienceResilience is at the heart of a successful financial system.For financial firms and the financial system, financial resilience has always been critical to success. We saw this to the huge cost of society and individuals during the Great Financial Crisis. Since then, significant work has been done to reform the regulatory regime and rebuild financial resilience. That a good deal of success has been achieved in this area can be seen from the way in which the financial system has weathered a number of recent periods of turbulence and stress. Financial resilience will always be a focus of our regulatory and supervisory work. This is to ensure that it remains firmly at the top of firms’ agenda, without continuing attention it can quickly be eroded. Moreover the nature and dynamics of financial risks in the system continue to change and evolve - for example in the non-bank sector. It is important that firms and regulators continue to assess and respond to these changing risks.Operational resilience is rightly a key priority at the current time. The combination of the centralisation of digital processes in the functioning of the financial system, rapidly evolving technology, the major role of third-party providers, and the consequence of the threat landscape makes it a critical concern for firms and for regulators.The Digital Operational Resilience Act (which came into application almost 1 year ago today) represented a major policy response from the EU to growing cyber and ICT risks in an increasingly digital and interconnected financial system. At the firm level, it requires institutions to strengthen their operational resilience frameworks. Importantly it also seeks to address operational resilience at a system level, taking a holistic view of the ecosystem within which firms operate. At the system level, it enhances incident reporting and intelligence sharing and establishes a new oversight framework for critical ICT third-party providers which takes into account the dimensions and nature of the financial sector’s reliance on such providers.Much has been achieved over the past 12 months with the commencement of incident and cyber threat reporting, the collection of registers of information on contractual relationships with ICT third party providers, the national identification of firms subject to Threat Led Penetration Testing, the identification of critical ICT third-party providers and preparation for their direct oversight by the ESAs. Now firms are getting ready for the second collection of DORA registers of information and the first TLPTs are about to begin. We have approached this work keeping in mind that DORA recognises that removing all risk is not achievable, and that therefore the objective is to strengthen the digital operational resilience of the financial system as a whole. This is not a once and done exercise, firms will need to actively ensure their digital operational resilience on an ongoing basis, deepening the maturity of their practices as new norms become embedded and new risks emerge, in a spirit of continuous improvement. This is reflected in the finding from our recent thematic work on operational resilience in the MiFID investment firm sector.4 Through this piece of work we observed a maturing of operational resilience frameworks in this sector. We identified areas where some firms need to make enhancements, including in important areas like identifying their critical or important business services and mapping how these services are delivered. More broadly, rising cyber threats, coupled with concentrated reliance on a relatively small number of third parties for ICT services, increase the risks of technological disruption. I therefore want to emphasise the need for firms to continue to build on these foundations especially in the area of digital operational resilience.Leveraging technologyThe importance of operational resilience reflects the extent to which the financial system has become wholly integrated with digital technology.More broadly, one of the key challenges for firms, compliance professionals and regulators is to ensure that as digital technology rapidly evolves and becomes ever more the basis of new and changed business models, processes and practices, this happens in a way that is aligned with the sound running of firms, consumers’ interests and financial stability.AI is an innovation that will be transformative. AI tools and technologies have the potential to deliver significant benefits for consumers, investors and for the financial sector. We are also looking to how AI can assist us in our work as supervisors.However risks arise that could adversely affect firms, their customers and wider society. One of the Central Bank’s supervisory objectives is to be close to how AI is being used by the firms that we regulate, with the overarching aim of seeking to ensure that its adoption is beneficial and done in a way that supports our regulatory objectives. Before deploying AI, firms need to understand the technology itself and how its adoption is aligned with the firm's overall strategy, risk tolerance, and compliance framework. And whether AI is an appropriate tool in each circumstance taking into account its characteristics, including challenges around the explainability of the output produced.The model inputs need to be right. if data inputs include an element of bias, that may feed through to model output. Ethical use of data and consideration of data privacy is also hugely important to avoid erosion of trust in this new technology.The model itself needs to be correct for the use case and model outputs must be used in a well-considered manner.In some cases AI has the potential to interact with an existing risk, causing it to evolve in a new or a different way. Consideration must be given to how the adoption of AI interacts with the firm’s operational risk profile or its cyber resilience.All of this must be underpinned by effective governance and oversight. When using AI to deliver products or services, firms need to adhere to the same standards expected when deploying more traditional technology. Both the new EU AI Act and much of the existing relevant technology-neutral regulation will be important for firms and their compliance functions as this journey continues.Delivering supervision under our new approachThe final topic that I want to address today is the Central Bank’s supervisory approach. During 2025 and continuing into 2026 we have been introducing a revised approach that continues to be risk-based, that is more outcomes focused, less process driven, and integrated across all our safeguarding outcomes—financial stability, protection of consumer and investor interests, safety and soundness and the integrity of the system.5This evolution of our supervisory approach will enable us to deliver ever more effectively on our regulatory objectives. Amongst the ways it seeks to do this are the following:By being more integrated it allows us:To take a holistic view of the risk landscape and allocate our resources accordingly;To act more efficiently and effectively so that our supervisory activities and interventions support multiple outcomes at the same time;To really focus on the outcomes we seek, and not unduly on the process.By being more outcomes focused, it allows us:To have better engagement with regulated firms, through clearer communication of our concerns and the outcomes we want to see;To enhance the degree to which firms and their leadership and staff internalise the regulatory objectives;To focus more on delivering outcomes, rather than simply addressing point risks; proportionately using our supervisory toolkit to achieve our aims.By being more efficient, it allows us:To prioritise better;To deploy scarce resources to maximum effect;To contribute optimally to delivering on our mandate for our citizens.The implementation of our revised approach to supervision is an ongoing effort. We continue to value stakeholders feedback and engagement on it.ConclusionI will conclude here. I hope that my remarks today have provided a useful insight into how we at the Central Bank think about some of the topics that are likely to be on your agenda. Many thanks for your attention.  I now look forward to our Questions and Answers.[1] Remarks by Deputy Governor Colm Kincaid to Central Bank of Ireland’s Consumer Protection Code Workshop - Modernising how we protect consumers in vulnerable circumstances [2] Remarks by Director Gerry Cross, Director Financial Regulation - Policy and Risk: Regulating for Better Outcomes [3] Central  Bank, Regulating & Supervising well – a more effective and  efficient framework, December 2025 [4] Thematic Assessment: Operational Resilience in the MiFID Investment Firm Sector[5] Central Bank: How we Regulate – Supervision

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Harbor Valtrix– Central Bank of Ireland Issues Warning on Unauthorised Firm

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Economics Winter Workshop 2025: Opening Remarks by Governor Gabriel Makhlouf

In this, his final blog for 2025, Governor Gabriel Makhlouf reflects on Ireland and the euro area’s economic performance and looks ahead to 2026, drawing on the Quarterly Bulletin and latest eurosystem staff projections published this week.

MDD is projected to grow by just below 4 per cent in 2025. From 2026 to 2028, MDD is forecast to grow at an annual average rate of 2.9 per cent per annum.More positive momentum in MNE investment amid lower uncertainty contrasts with slower pace of growth in domestic sectors and cooling of the labour market as drag from capacity constraints becomes evident.Outlook for slightly higher overall inflation, as underlying services price growth more persistent at a higher rate than pre-pandemic. The Central Bank has today (19 December 2025) published its fourth and final Quarterly Bulletin of 2025. On the launch of the Quarterly Bulletin, Robert Kelly, Director of Economics and Statistics said: “Despite the notable challenges the Irish economy has faced this year it has shown resilience throughout 2025. The outlook for the Irish economy in the medium term is being shaped by differing sectoral performances, ongoing structural change, geopolitical tensions and policy actions both at home and abroad. Multinational sectors that predominantly export are adapting to a changing international environment for trade and investment, and so far that adjustment has been relatively benign for Ireland. Domestic activity signals are more mixed, with data pointing to a slower pace of growth and higher inflation.”“How the multinationals have adapted to the changing EU–US trade and investment relationship, particularly pharmaceuticals remains a central driver of Ireland’s headline economic indicators. Ireland is a major hub for producing high‑demand medicines, yet firms have announced intentions to change pricing polices across their markets and their related value‑chain management and investment strategies.  This could lead to greater volatility in headline GDP and alter the pattern of the volume and value of activity located in Ireland relative to elsewhere in the pharma value chain, with knock‑on effects for profitability and corporation tax receipts. Meanwhile, the ICT services sector - another major global sector with a significant presence in Ireland - both enables and is being reshaped by rapid advances in AI. Creating conditions for the Irish‑resident ICT sector and the wider economy to benefit sustainably from this transformation is increasingly important in a more fragmented global landscape.”“As a small, highly globalised economy, Ireland’s prosperity will always be influenced by its attractiveness to foreign direct investment. Yet developments in the domestically-oriented economy and indigenous exporters are decisive for long‑term, sustainable growth in employment and living standards. Gauging domestic performance is challenging given frequent revisions to National Accounts data and the influence of MNE investment on even “modified” activity measures.  Nonetheless, after several years of operating above potential, momentum in the domestic economy is easing, reflected in lower employment growth and a slower pace of activity in domestic sectors. This is broadly consistent with an economy facing significant capacity constraints, and it reinforces the need to improve supply‑side conditions that ultimately determine the domestic economy’s capacity to deliver sustainable gains in living standards.”Taking account of the realised performance in the year to date along with the stimulus from additional Government expenditure for 2025 announced subsequent to the Budget, overall MDD is projected to grow by just below 4 per cent in 2025. From 2026 to 2028, MDD is forecast to grow at an annual average rate of 2.9 per cent per annum. This marks an upward revision to the projections for 2026 and 2027 from QB3. The improved outlook compared with QB3 is largely due to an upward revision to the forecast for modified investment.  This is informed by the resilient outturn for MNE investment in the year to date (most notably in intangible assets), a smaller than previously estimated drag on investment from uncertainty over the forecast horizon as well as Government policy decisions that are assumed to support higher investment, especially towards the end of the forecast horizon. Despite the improvement to the outlook compared with the forecasts in September, the projections envisage a slowdown in MDD growth from the 6.1 per cent annual average realised outturn from 2021 to 2024. The projected slowdown in growth is informed by a number of considerations.  The rapid growth in employment and incomes that underpinned consumer spending since 2021 is expected to continue to moderate, feeding into a lower projected pace of growth in MDD. The cooler labour market is expected to see employment growth easing to below 2 per cent, while the unemployment rate is expected to average 5 per cent and average wage growth easing back from 4.6 per cent this year to 3.5 per cent in 2028.  Despite the expectation of a pickup in construction activity, with housing output forecast to reach 44,500 units in 2028. growth in overall modified investment is expected to be more modest. A large increase in pharmaceutical exports has contributed to double-digit GDP growth in the first three quarters of 2025. The pace of growth in pharmaceutical exports eased in Q2 following the exceptional Q1 outturn, which was influenced by a frontloading of exports to the US. However, a combination of the growth in non-pharma goods exports and a renewed resurgence in pharmaceutical exports in September means that overall exports, and hence GDP, will increase sharply in 2025. In the first nine months of the year, these increased by 11.8 per cent and 15.8 per cent respectively. Headline and core inflation have increased in recent months with services making the largest contribution. HICP inflation is now expected to average 2 per cent per annum out to 2028. Headline HICP increased, on a year-on-year basis, by 3.1 per cent in November, with core inflation rising to 2.6 per cent in October. The equivalent outturns for August were 1.9 per cent and 1.5 per cent. The recent increase in inflation is largely explained by a pick-up in services inflation. Trend services inflation appears to have settled into a persistently higher phase post‑Covid, at around 3 per cent, and higher than any period since 2007. This is occurring even though construction - typically a lower‑productivity sector - accounts for only 5.5 per cent of output in domestically dominated sectors, compared with 10 per cent in 2007. The more domestic activity relies on lower‑productivity sectors, the greater the risk of higher inflation, underscoring the need for careful macroeconomic management of the necessary expansion in construction activity to deliver on infrastructure and housing needs, and for actions to improve the productivity of the sector itself.With potential upside possibilities to growth being restricted, the overall balance of risk to the forecast for economic growth is tilted to the downside. These downside risks include the potential for an escalation of global trade tensions and delays in relieving infrastructural deficits, both of which would reduce growth below the central forecast. The balance of risks to the inflation outlook have shifted from being broadly balanced to being primarily to the upside. Despite cooling, the labour market remains relatively robust with unemployment forecast to remain close to 5 per cent. In such circumstances, stronger nominal wage growth and domestic demand could lead services inflation to be higher than expected. Bottlenecks in housing supply and high construction costs may continue to push up rents and housing-related inflation, which in turn could contribute to upward pressure on wages and goods prices. At the same time, in the absence of significant increases in construction sector productivity, the additional share of economic activity envisaged for this sector would see overall productivity in the economy be lower than would otherwise be the case, which in turn could amplify increases in unit labour costs and their pass-through to inflationary pressures.  Any renewed spike in global energy or food prices due to geopolitical tensions could provide another source of additional inflationary pressures. Against that, a stronger euro or a slowdown in government expenditure growth could lessen inflationary pressures. If infrastructure and housing needs are met at the scale envisaged in our forecast to 2028, domestic demand should retain momentum. Sustaining, if not prudently increasing that momentum requires careful macroeconomic management, including implementing structural reforms that reduce delays in delivering enabling infrastructure and maximising the use of available, serviced land for housing in areas of high demand. Recent initiatives such as the Accelerating Infrastructure Action Plan are welcome in that respect. Supporting appropriate technology adoption in delivering housing output will boost productivity and limit the ultimate labour demand in a construction sector that needs to expand. A forward-thinking approach to migration and measures to increase participation among older workers can help align technological progress and demographic change with sustainable, long‑term improvements in living standards.An important element of prudent macroeconomic management is for fiscal policy to keep a sustainable medium-term orientation, anchoring expenditure growth to the economy’s sustainable revenue-raising ability, reducing the underlying general government deficit (excluding excess corporation tax), and improving the stability of the tax base by broadening it and reducing concentration risk.  Doing so will create both the fiscal and economic space for the necessary rise in public and private investment.  

Tava Loans - Central Bank of Ireland Issues Warning on Unauthorised Firm

Ava Credit Finance - Central Bank of Ireland Issues Warning on Unauthorised Firm