ECB’s Makhlouf: Response to Future Challenges Cannot Be Accommodative

11 November 2023

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf on Saturday said that challenges emerging from geopolitical tensions, financial system disruption and developments in technology called for a different reaction than before.

In a speech during a conference of the Irish League Credit Unions, a text of which was posted to the website of the Central Bank of Ireland, which he heads, Makhlouf, said that in the light of new challenges, ‘the previously seen monetary, fiscal and regulatory responses will not, and cannot be as accommodative going forward.’

‘It would be inappropriate, unwise and unsafe to relax regulation, or provide long-term latitude, just at the moment when risks to the system and consumers are becoming greater, or at least becoming more unpredictable’, he said.

The pace of change in financial services was different than in the past, he said.

‘[A]ll the indications are that these [challenges] are not once off events, may well be our new norm (at least for the foreseeable future), and that the pace of change may even accelerate with the advent of artificial intelligence, crypto capability, and other technological innovations’, he said.