Central Bank chief Makhlouf warns uncertainty will persist even if trade war passes
"Even if a full-blown trade war turns out to be short-lived, the uncertainty effects will persist for some time," Mr Makhlouf, the Governor of the Central Bank here, said.
"Amplification risks from elevated public and private debt levels, and how these might ripple through the financial system, are a further downside risk," he added.
He made his comments in a speech at the International Economic Symposium in Dublin, an event co-hosted by the Central Bank and the National Association for Business Economics.
"The global economic integration that has characterised most of the last half-century is now stalled, if not reversing," the Governor also noted.
He said the last few weeks have seen an acceleration in the pace and scale of change.
"The sudden shift led to increased financial market volatility across the world, reminding us all of the fact that that global trading systems and global capital flows are two sides of the same coin," he stated.
"As a country at Europe's western edge, but at the heart of the European Union, and indeed the euro area, Ireland plays an important role in the global financial ecosystem," he said.
"We are a highly globalised economy, with a large outward-focused financial sector. We see significant capital flows through our financial system and we have been closely and carefully analysing daily trade flow data during this period of volatility," he added.
Governor Makhlouf said we are facing a new global economic order characterised by trade fragmentation, structural economic shifts, more frequent supply disruptions and policy unpredictability.
"Nobody welcomes the geoeconomic fragmentation we are currently experiencing, but I believe it merely serves to accelerate changes that up to recently were more gradual. To a large extent, it brings to a head decisions that, for Europe, had been put off for far too long," he concluded.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Journal
7 hours ago
- The Journal
Protest over Central Bank facilitating Israeli bonds to gather outside Taoiseach's office later
A PROTEST WILL assemble outside the Taoiseach's office later in relation to the Central Bank facilitating the sale of Israeli State bonds. Following Brexit, Israel chose the Central Bank of Ireland as the designated authority to approve Israel Bonds sold in the EU, since it could no longer use the UK for this purpose. Sales of Israel Bonds have surpassed $5 million since the 7 October attacks. Israel Bonds are advertised as supporting the country's economy and holders of the securities are promised that the principal and interest will be repaid after the bond matures. In recent times, websites promoting the bonds emphasise their role in supporting Israel during the war. Israel president Isaac Herzog has stated that Israel Bonds have a 'crucial role during this time of conflict and war'. In a video to Israel Bonds holders in October 2023 , Herzog said the bonds are a means for people 'to step forward to do your part in this critical hour'. The Government was last week urged by the Oireachtas Committee on Finance to engage with the EU to amend the law so the Central Bank can refuse to facilitate the sale of Israeli State bonds. The committee's chairwoman, Sinn Féin's Mairead Farrell, said the Central Bank's facilitation of Israeli bonds arose as 'a matter of concern'. 'The committee understands that the Central Bank may only refuse the approval of a prospectus where the Central Bank has legal basis to do so,' she said. Advertisement She added: 'The issuing of bonds by the State of Israel is seen to assist in the financing of Israel's continued violations of human rights. 'As such, the facilitation of the prospectus by the Central Bank raises issues of significant concern for the Joint Committee, not only around moral obligations but also obligations under international law.' Today's protest, organised by the Ireland-Palestine Solidarity Campaign (IPSC), will assemble at the Department of the Taoiseach at 5.30pm, marching via the Department of Finance to the Department of Foreign Affairs for a rally. A spokesperson for the IPSC said the Central Bank is the sole gateway into the EU for 'Israel's genocide-funding bonds'. 'These bonds fund the forced starvation and the genocide of the Palestinian people being perpetrated by Israel in Gaza,' added the spokesperson. The IPSC has called on the Government to direct the Central Bank to refuse to renew Israel bonds when the current approval period ends in September. IPSC Chairperson Zoe Lawlor noted that the Oireachtas Finance Committee has called on the Government to amend the law so that the Central Bank can stop facilitating the sale of Israeli State bonds in the EU. 'Hand wringing is not enough,' said Lawlor. 'The Government must act to stop the Central Bank, an organ of this stage from doing harm. 'It must direct the Central Bank to stop funding the starvation and murder of the people of Gaza.' Speakers at today's rally will include Social Democrats TD, who last month launched legal proceedings against the Central Bank over claims investors in Israeli bonds could be legally complicit in genocide in Gaza. He alleges that the Central Bank's failure to ban the marketing, distribution and sale of Israeli bonds exposes investors to risks that have not been disclosed to them. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
RTÉ News
a day ago
- RTÉ News
Lenders banking on customer apathy on mortgage rates
The latest Mortgage Switching Index suggests that thousands of mortgage holders on variable rates could be paying over 2.25 percentage points more than necessary. said that despite the return of sub-3% variable rates to the market, many borrowers remain on legacy variable products of up to 5.25%, adding that while fixed rates have decreased over the last 18 months, variable rates have remained "stubbornly" high. Recent Central Bank figures show that 14% of all mortgages are on variable rates, which equates to almost 100,000 homeowners. Today's survey - for the second quarter of 2025 - found that mortgage switchers can now save more than double the annual savings available just five years ago. The average mortgage drawdown now stands at €346,842, up over €112,000 since the second quarter of 2020 - on the back of rising property prices and increased borrowing levels. As mortgage amounts grow, so too does the impact of securing a lower rate with switchers saving an average of €7,505 per year, up from €3,349 five years ago. The Mortgage Switching Index is published every quarter and tracks the savings available to mortgage holders in Ireland through switching. It is based on the average mortgage drawn down in the quarter and the differential between the highest and lowest mortgage interest rates available. In June, the lowest rate on the market dropped below 3% to 2.98% for the first time since 2022. "Banks have large volumes of existing mortgage customers sitting on these high variable rates and to reduce them would mean large back book repricing which would be costly," Martina Hennessy, the CEO of said. She said that lenders are banking on customer apathy. "Unless more borrowers actively review and switch, there's no pressure to bring these uncompetitive rates down and we will struggle with pricing discipline in the Irish market," she stated. Martina Hennessy also said that the increase in savings for switchers is the direct result of larger mortgages but also significant interest rate spreads. "This is leading to a resurgence in mortgage switching. However there still remains a large cohort of homeowners sitting on uncompetitive rates," she said. "With rates falling, larger loans being drawn down, and new flexible switching options available, apathy can cost borrowers thousands," she added.
Irish Independent
a day ago
- Irish Independent
Mortgage lenders ‘banking on people's apathy' as they charge sky-high interest rates
It is estimated that around 100,000 mortgage holders are paying way over the odds on their home loans. They are paying variable rates that are up to 2.25 percentage points more than necessary, according to the latest Irish Independent Mortgage Switching Index. Despite the return of sub-3pc variable rates to the market, many borrowers remain on legacy variable products. These are as high as 5.25pc. Fixed rates have decreased hugely over the last 18 months, but variable rates 'have remained stubbornly high', according to chief executive Martina Hennessy. She quoted Central Bank figures indicating that 14pc of all mortgages are on variable rates. This works out at almost 100,000 homeowners. 'Banks have large volumes of existing mortgage customers sitting on these high variable rates and to reduce them would mean large back book repricing, which would be costly,' Ms Hennessy said. 'Lenders are banking on customer apathy. Unless more borrowers actively review their rates and switch, there's no pressure to bring these uncompetitive rates down and we will struggle with pricing discipline in the Irish market.' The Mortgage Switching Index for the second quarter of the year found that borrowers can now save more than double the annual savings available just five years ago. The average mortgage drawdown now stands at €346,842, up over €112,000 since the second quarter of 2020. This trend is being driven by rising property prices and increased borrowing levels. Higher mortgage amounts also mean there is a greater impact from securing a lower rate with a mortgage switcher. ADVERTISEMENT Learn more Ms Hennessy said people switching from variable rates can save an average of €7,505 per year, up from €3,349 five years ago. The Irish Independent Mortgage Switching Index is published quarterly and tracks the savings available to mortgage holders in Ireland through switching. It is based on the average mortgage drawn down in the quarter and the differential between the highest and lowest mortgage interest rates available. This is leading to a resurgence in mortgage switching In June, the lowest rate on the market dropped below 3pc, at 2.98pc. This is the first time rates were this low since 2022. 'The increase in savings for switchers is the direct result of larger mortgages, but also significant interest rate spreads,' Ms Hennessy said. 'This is leading to a resurgence in mortgage switching. However, there still remains a large cohort of homeowners sitting on uncompetitive rates. 'With rates falling, larger loans being drawn down, and new flexible switching options available, apathy can cost borrowers thousands.' Recent figures from the Banking and Payments Federation Ireland show switching activity up 67pc in volume and 91pc in value year-on-year. The average value of switcher mortgages has increased to nearly €282,000, up from €235,000 five years ago. Top-up mortgages have increased by 25pc, with homeowners choosing to stay put due to a shortage of homes.
