Irish Central Bank Governor Urges Bank Boards to Understand AI’s Limits

Central Bank of Ireland Governor Gabriel Makhlouf urged bank boards to understand artificial intelligence’s limits and keep responsibility for decisions clear as they consider how AI could improve banking services.

Makhlouf spoke at an Oct. 8 book launch in Dublin. He said directors need enough knowledge to assess what AI can do and where it may fall short. Boards must “ensure that responsibility for decisions remains clear,” he said.

He also identified cyber threats, interruptions to critical services and dependence on outside providers as challenges for bank governance. Clear individual responsibilities should help people take ownership of decisions and raise concerns, he said, while boards should be able to question the direction management is taking.

Makhlouf called for clearer regulation with less duplication. His remarks did not announce a policy change.

The book, The Evolution of Bank Governance in the EU, examines governance provisions in the European Union’s Capital Requirements Directive. It covers AI risk management, directors’ duties and remuneration. A 2024 revision of the directive addresses supervisory powers, sanctions, branches of banks from outside the EU, and environmental, social and governance risks.