Central Bank of Ireland Governor Says AI Market Correction Would Not Surprise

Central Bank of Ireland Governor Gabriel Makhlouf said a market correction tied to artificial intelligence investment would not surprise him, citing elevated valuations and borrowing used to finance the technology buildout.

Makhlouf made the remarks at the fifth Financial System Conference in Dublin on Monday, Nov. 2. “In my view a market correction would not be a surprise and, indeed, corrections have been a feature of other historic infrastructure booms,” he said.

He cited the scale of investment in AI infrastructure and debt financing, as well as circularity in some financing arrangements.

Direct exposures to major U.S. technology stocks are limited across Ireland’s nonfinancial companies and traditional financial sector, while Irish-domiciled equity funds have greater exposure. A shock could affect the profitability of U.S. multinationals with a presence in Ireland, tighten global financing or change the U.S. growth outlook.

Makhlouf said the vast majority of firms regulated by the central bank already use AI. AI-related queries account for around half of current engagements at its Innovation Hub, up from one in five a few years ago.

On accountability, Makhlouf said, “it is humans who deploy them and therefore humans who remain accountable and responsible for them.” He previously urged bank boards to understand AI’s limits and keep responsibility for decisions clear in remarks on AI oversight.

The bank’s third Innovation Sandbox, Advancing AI for Consumer Good, is scheduled to open applications in January 2027. The six-month program will address support for vulnerable consumers, automated decisions that are fair and explainable, resilience against fraud and scams, and accountability when AI acts on a consumer’s behalf.