Global Regulator & Central Bank News Roundup

The New Zealand Financial Markets Authority (FMA) has released updated guidance clarifying how existing fair dealing and disclosure obligations apply when issuers promote financial products with sustainability-related characteristics. The guidance is aimed at issuers of products incorporating environmental, social, value-based or similar considerations, particularly products targeted at retail investors, and replaces earlier guidance on integrated financial products without introducing new legal requirements. In response to its consultation, the FMA received 20 written submissions from stakeholders including industry bodies, banks and law firms. While the majority supported the principles-based approach, feedback led to several substantive changes. The guidance was renamed from ethical investing disclosure guidance to sustainability-related disclosure guidance, reflecting concerns that ethical was too narrow and did not capture responsible, sustainable, ESG-integrated or financially driven sustainability approaches. The FMA also removed the section on financial advice after submitters said it sat outside issuer disclosure guidance, removed the section on climate-related disclosures to avoid uncertainty for climate reporting entities, and replaced references to transition-focused financial products with broader language on investments linked to the transition to a lower-carbon or net-zero economy. The final guidance retains four core principles: claims need to be clear, claims need to be substantiated, messages need to be consistent, and third-party involvement is effectively managed. In response to feedback, the FMA expanded examples across product types and strategies, added more detail on positive screening, clarified that stewardship is broader than active ownership, and introduced guidance on using te reo Māori terminology and Māori values without creating misleading impressions. It also sharpened the treatment of statutory duties, including the distinction between fair dealing obligations and Part 3 disclosure requirements, the non-application of the unsubstantiated representations prohibition to product disclosure statements, register entries and other disclosure documents, and the potential liability implications where sustainability-related information is incorporated by reference.

The Monetary Authority of Singapore (MAS) has concluded its consultation on Product Highlights Sheets and the complex products framework, confirming a more disclosure-led regime for retail investors in complex products. Financial advice will generally become optional for complex products, supported by clearer Product Highlights Sheets and pre-transaction complexity alerts, while stronger safeguards will continue to apply to investors who require additional protection. The enhanced Product Highlights Sheets will use clearer complexity labelling and more standardised disclosure. Complex products will carry a red heading band and a statement that the product is complex, while collective investment schemes excluding real estate investment trusts and investment-linked policy sub-funds will need diagrams showing the impact of fees on the amount invested. Investment-linked policies will require a Product Highlights Sheet and will be classified as complex products because they combine insurance and investment features, with different layers of fees and charges. MAS will also require financial ratio disclosures for relevant securities products and will replace the existing “Excluded Investment Products” and “Specified Investment Products” terminology with “non-complex product” and “complex product”. Distribution safeguards will be streamlined around a single Customer Knowledge Assessment, replacing the separate Customer Knowledge Assessment and Customer Account Review. MAS will not proceed with a proposed Product Knowledge Assessment, but existing learning modules will remain available, and investors who pass them will be treated as having passed the Customer Knowledge Assessment. Financial institutions must give all investors a pre-transaction alert for complex products and must give investors who fail the Customer Knowledge Assessment a one-off warning that such products may not be suitable. Selected Clients will remain subject to stronger safeguards when transacting in complex products on execution-only platforms, including full financial advice unless they pass the Customer Knowledge Assessment and opt out.

Bank Indonesia has launched Green Calculator Version 2 to improve the consistency, standardisation and reliability of carbon emissions calculations for businesses and financial institutions. The Green Calculator is a free application for calculating carbon emissions, designed to support sustainability reporting, green finance development and climate risk management. It produces emissions data aligned with the international Greenhouse Gas Protocol standard. The updated version expands coverage, strengthens methodologies and improves user accessibility. A 2025 Bank Indonesia survey of 105 banks found that most banks calculated emissions independently and that the Green Calculator was the most widely used tool.

An industry working group under the Hong Kong Green and Sustainable Finance Cross-Agency Steering Group’s transition finance workstream has published the first phase of an operational reference guide on transition finance for the information and communications technology sector. The guide is intended to help financial institutions and corporates apply international transition finance and transition plan disclosure frameworks in Hong Kong and the broader Asia Pacific region, without defining transition activities or introducing new transition planning or disclosure requirements. The report translates existing international transition-finance and transition-plan disclosure frameworks into an ICT-sector reference for general-purpose corporate financing. It identifies three areas relevant to financing and investment decisions: governance, accountability and transparency, delivery strategy, and metrics and targets. The analysis gives particular weight to the sector’s energy-intensive growth, including data centres and AI-related computing demand, while also recognising ICT companies’ role in enabling emissions reductions across other sectors. The guidance is organised around the information financiers are likely to need when assessing transition strategies: governance and accountability, a delivery plan embedded in business operations, and targets that can be measured and tracked over time. Case studies of Alibaba Cloud, Lenovo and Tencent illustrate different transition issues, including sustainable data-centre expansion, supply-chain decarbonisation and the use of science-based climate targets. Later phases will address activity-level financing and investment, as well as stewardship practices.

The European Union Anti-Money Laundering Authority (AMLA) published findings from the Chair’s 2025 roadshow across all 27 EU Member States, identifying a broadly shared set of weaknesses in the EU anti-money laundering and countering the financing of terrorism framework. Stakeholders pointed to a rapidly evolving money laundering and terrorist financing risk landscape, materially different starting points across Member States and sectors, persistent supervisory fragmentation, and capacity gaps that limit the system’s ability to respond consistently across the Union. The report identifies fraud, including AI-enabled impersonation and deepfakes, crypto-assets and related services, cross-border transactions and instant payments, cash and real estate, online and illegal gambling, and sanctions circumvention as key risk areas. It also highlights low AML/CFT maturity in parts of the non-financial sector, uneven FIU and supervisory capabilities, resource constraints, technology gaps, under-detection and under-reporting in some sectors, and legal uncertainty around data sharing and the interaction between AML/CFT obligations and data protection requirements. Stakeholders also raised concerns about the compressed implementation timeline for the new EU AML/CFT framework and the need to calibrate expectations of AMLA against its mandate and operational capacity. In parallel, AMLA has published draft regulatory technical standards to define the duties of home and host supervisors and the practical modalities for cooperation in AML/CFT supervision of cross-border groups of obliged entities. The draft standards are directly relevant to the roadshow findings on supervisory fragmentation and inconsistent cross-border cooperation, as they set out arrangements for supervisory communication, cooperation requests, recordkeeping, information exchange, cross-border inquiries, and common supervisory approaches. The framework would apply to groups operating in the financial and non-financial sectors and would complement the AML/CFT supervisory colleges framework where college-specific processes do not otherwise govern the issue. Home and host supervisors would have to share information on request and on their own initiative where it could significantly affect the inherent or residual risk assessment of an obliged entity in another Member State, including risk assessments, supervisory findings, relevant regulatory developments, and sanctions or administrative measures. Supervisors would be expected to check existing registers and databases before making information requests. Information exchanged within the EU supervisory system could be disclosed to other members without prior consent from the originating supervisor, subject to notification, while information from third-country counterparts would remain subject to prior consent. AMLA will hold a public hearing on 28 May 2026 to consult on the draft standards.

The European Securities and Markets Authority has published a non-binding CCP resolution briefing setting out a methodology for National Resolution Authorities to operationalise the write-down and conversion of instruments tool in central counterparty resolution plans. The guidance focuses on how authorities can prepare to use the tool to absorb losses, recapitalise a CCP or support other resolution tools under the EU CCP recovery and resolution framework. The briefing covers when the tool must be used, how authorities should obtain and format data, calibrate the amount of instruments and liabilities to be written down or converted, assess impacts on shareholders, creditors, clearing members, linked financial market infrastructures and markets, and coordinate implementation with relevant stakeholders. It also addresses timing constraints, including whether resolution can take place over a weekend or must be executed overnight, third-country recognition and litigation risks, and the potential operational, financial and business consequences of a change in CCP ownership following application of the tool. Following use of the tool, the CCP must submit a business reorganisation plan within one month, with a possible extension of up to two months where necessary to achieve resolution objectives. National Resolution Authorities must assess, in cooperation with the competent authority, whether the plan would restore the CCP’s long-term viability within one month of submission.

The European Central Bank has published dinner remarks by Executive Board member Philip Lane in which he outlined ECB staff analysis suggesting that a global energy shock would hurt euro area activity more and generate stronger inflation spillovers than a regional shock. He said small and clearly transitory inflation deviations do not call for a monetary policy response, whereas material and persistent overshoots could require measured or more forceful policy adjustment, assessed meeting by meeting and without pre-committing to a rate path. A Bayesian vector autoregressive model estimated by ECB staff suggests that a geopolitical oil supply shock raising the real oil price by 10 per cent on impact would lower euro area real GDP growth by around 0.2 to 0.3 percentage points in each of the first three years, with investment more affected than consumption. Separate multi-country DSGE simulations, with both regional and global shocks scaled to lift EU energy prices by 10 per cent on impact, show a larger output loss under a global shock because it also raises the price of energy-intensive imports and weakens external demand. While the direct energy-price contribution to inflation is the same by construction, the cumulative contribution of the non-energy component is about 0.4 percentage points in a regional shock versus 1.5 percentage points in a global shock. Lane said firms' selling price expectations point to higher output prices in some sectors in the coming months, but wage agreements reached since the outbreak of the war in the Middle East still indicate easing wage pressures and no reaction to higher energy prices, while food repricing has been slower than in 2022.

The Dutch Authority for the Financial Markets has published a report setting out how banks and other financial firms with similar customer processes should strengthen their approach to combating perceived discrimination. Based on research at five major banks, the authority expects firms to address discrimination actively, including where unequal treatment arises unintentionally from risk-reduction processes such as customer and transaction reviews linked to anti-money laundering and sanctions compliance. The report finds that participating banks now acknowledge the problem of experienced discrimination and that most have broadened their focus beyond gatekeeper processes to wider service provision. The authority sets five expectations: board ownership of a clear anti-discrimination vision, organisational arrangements to detect and address discrimination, a culture that supports prevention, appropriate communication during customer investigations, and systematic collection of signals and complaints. Practical recommendations include assigning clear responsibilities across the three lines, treating discrimination as a specific non-financial risk, addressing risks linked to artificial intelligence and automated decision-making, improving the tone and accessibility of customer communications, categorising discrimination complaints, actively gathering signals from affected groups, and reporting findings to the board.

The Swiss Financial Market Supervisory Authority (FINMA) has launched a consultation on a partial revision of its Anti-Money Laundering Ordinance to bring the rules into line with recent amendments to the Anti-Money Laundering Act, address Financial Action Task Force recommendations and codify selected supervisory practice. In practical terms, the draft would require financial intermediaries to understand the ownership and control structure of contracting parties and would clarify the organisational measures they must take to prevent breaches of coercive measures under the Embargo Act. The proposal also updates several targeted due diligence and payment-related rules. It would repeal an obsolete provision treating payments to and from Liechtenstein as domestic payments, update references to recognised self-regulation for banks, securities firms and insurance institutions, and formalise FINMA’s practice for payable-through accounts in correspondent banking relationships. Under that approach, a financial intermediary could execute payments for a customer’s clients only where the customer can provide, on request, the client information needed for the intermediary to fulfil its due diligence duties. The draft would also make clear that a declaration on the beneficial owner must always be obtained where a contracting party maintains sub-accounts for individual clients. The consultation runs until 9 June 2026. The partially revised ordinance is due to enter into force on 1 January 2027, alongside revised due diligence rules issued by the Swiss Bankers Association and the self-regulatory organisation of the Swiss Insurance Association.

The House of Lords Industry and Regulators Committee published a report warning that unclear government guidance, prescriptive legislation and competing statutory duties could prevent UK regulators from meeting the Government’s call to facilitate innovation and growth, potentially deterring investment from the UK. It calls on the Government to give regulators clearer sector-specific direction on what supporting growth means in practice, including how to manage trade-offs with consumer, competition and environmental protections and what level of risk regulators should accept. The Committee says the Government’s target to cut the administrative burden of regulation by 25%, from a GBP 22.4 billion annual baseline by GBP 5.6 billion by the end of the Parliament, may not address the wider cost of regulatory compliance. It recommends that departments’ annual simplification plans estimate reductions in both administrative and compliance costs, use a small number of outcome-focused metrics, and identify legislative blockages that prevent more flexible regulatory frameworks. For regulators, the report prioritises faster and more predictable decision-making, clearer guidance, early engagement with businesses, greater use of sandboxes and pre-application discussions, and better coordination where multiple regulators oversee the same project. The Committee is unconvinced by the general use of paid-for fast lanes and says the Government should first improve decision-making times for all applicants, while exploring broader lead regulator models beyond environmental regulation.

The UK Financial Conduct Authority, Bank of England and HM Treasury have issued a joint statement calling on regulated firms and financial market infrastructures to plan for and mitigate cyber security risks from frontier AI models under existing operational resilience rules and expectations. The statement does not introduce new expectations, but reinforces the authorities’ view that firms need effective protective, detective, threat containment, response and recovery capabilities as frontier AI increases the speed, scale and cost-effectiveness of cyber attacks. The authorities identify several priority areas for action: board and senior management understanding of frontier AI risks, investment and resourcing decisions that reflect exposure from unsupported systems, faster and more scalable vulnerability triage and remediation, management of third-party and supply-chain risks, and stronger access management, network security and data protection. Firms are also asked to consider automated and AI-enabled defence to match the tempo of AI-enabled attacks. The Government and UK financial authorities will continue to monitor frontier AI developments and engage with industry through the Cross Market Operational Resilience Group. The statement comes amid several other authorities and bodies including the Australian Prudential Regulation Authority and the International Monetary Fund have called out cyber risk concerns emanating from the latest frontier models.

HM Treasury has commissioned an independent Access to Banking Review to assess how branch closures and the shift to digital banking are affecting access to face-to-face banking services across the UK. The review will inform planned new powers in the Financial Services and Markets Bill that would allow the Government to intervene where evidence shows access to banking services is at risk. The review will gather evidence on the impact of branch closures, identify the people and communities most affected, and assess where further action may be needed. It will be chaired by Richard Lloyd OBE, who is due to provide a report and recommendations to the Government by October 2026. The Government is also supporting the rollout of banking hubs, with more than 275 announced and more than 230 open, but noted that existing protections cover access to cash rather than wider in-person banking services.

The German Bundesbank, in cooperation with vdpResearch, has published a new quarterly commercial property price index for Germany, adding a new data source for monitoring the market. The first release shows commercial property prices rising by 2.1 percent year on year in the first quarter of 2026, broadly continuing the upswing that began in mid-2024 after a temporary decline between 2022 and mid-2024. The index tracks price developments for offices, retail properties and multifamily buildings owned by companies. It includes an overall index, property-type sub-indices and five regional sub-indices covering cities of supraregional, regional and local importance, as well as urban and rural areas. The series is based on transaction data from vdpResearch's market volatility database drawn from the financing business of Pfandbrief banks, cooperative banks, savings banks and private banks, with more than 300,000 property transactions since 2013. Over the full observation period, multifamily buildings show the strongest price growth at about 110 percent, compared with about 75 percent for offices, while retail prices in the first quarter of 2026 were roughly back at their starting level after moderate fluctuations. Prices in cities of supraregional importance also show a slight lead over the rest of Germany in timing. The full data set is available through the Bundesbank's time series database.

The Brazilian Securities and Exchange Commission’s Office of Economic Analysis, Risk Management and Integrity has published a regulatory outcome assessment of the ESG disclosure fields introduced by Resolution CVM 59 into the Reference Form. The Reference Form is the main periodic disclosure document filed by registered securities issuers with information on the issuer’s business, risks, governance, management, compensation and other matters relevant to investors. The rule added ESG disclosure-or-explain fields covering sustainability reporting, climate and emissions data, ESG risks and opportunities, board oversight, diversity, and ESG-compensation related metrics. The study finds that Resolution CVM 59 improved baseline transparency by prompting issuers to map and disclose ESG practices during the voluntary phase, but did not fully resolve investor concerns over credibility, comparability and usefulness. A survey of 905 mainly individual investors indicated that difficulty obtaining ESG information has declined, while lack of confidence in disclosed information remains a key obstacle for those interested in the theme. A review of disclosures by 78 listed companies found overall quality closer to satisfactory, but identified weaker explanations for non-adoption under item 1.9 and weaker disclosure of diversity objectives for management and board bodies under item 7.1.e. The study also notes gaps such as companies referring to materiality matrices without clearly identifying related key performance indicators. The assessment further finds that the Reference Form is a secondary ESG information source, especially for institutional investors, which tend to rely on sustainability reports, integrated reports, third-party analysis and direct engagement with issuers. The forthcoming mandatory sustainability reports under CBPS 01 and CBPS 02, Brazil’s versions of IFRS S1 and IFRS S2, are expected to address several shortcomings by introducing international standards and independent assurance under Resolution CVM 193, while also making several Reference Form ESG fields redundant.

Argentina's National Securities Commission approved a broad simplification and reordering of its rules on the prevention of money laundering, terrorist financing and proliferation financing for capital market obliged entities. The revised regime reduces information requests from 19 to 10 forms and refocuses the regime on specified information on beneficial owners, compliance officers, risk assessment, internal controls, customer segmentation, transaction monitoring and politically exposed persons as a measure to simplify filing burdens. Separate from the reporting changes, the resolution revises operational and perimeter rules. It extends the relevant payment modalities and information regime to virtual asset service providers, removes the general use of cash except for clients under the Simplified Sworn Statement Regime for Income Tax, and adds electronic cheques as an accepted payment instrument where traceability is ensured. It also sets out fitness, integrity and solvency requirements for entities seeking registration with the Commission, including agents, markets, clearing houses and virtual asset service providers, with limited exceptions for virtual asset service providers at this stage. For virtual asset service providers, and for specified new reporting items for other obliged entities, the information filing obligation starts on 1 July 2026, with the full requested information due through the Financial Information Highway by 31 July 2026.

The Bank of Israel has published a 2025 progress report on the Digital Shekel Project, setting out work toward a possible decision by the end of 2026 on whether to issue a central bank digital currency. The report concludes that, under the current assumptions and preliminary design, the expected benefits of a digital shekel are likely to exceed the associated costs, with the cost-benefit analysis indicating a welfare gain equal to about 0.1% of average annual private consumption in present value over ten years. The report covers the proposed regulatory structure, technology, use cases, business adoption and public feedback. It would retain the Bank of Israel as system manager in a two-tier model, while supervision of participants would follow a decentralized approach through existing financial regulators, supported by a uniform system rulebook and coordination mechanisms. The Bank also found no clear rationale for separate retail and wholesale systems if both are issued, and concluded that the design is broadly technologically feasible, while noting implementation questions around system architecture, hosting, communication standards, secure components and offline payments. Business feedback showed limited but meaningful interest, especially where the digital shekel could lower transaction costs or enable instant settlement, while public responses broadly supported the proposed ecosystem model and emphasized privacy, interoperability, consumer protection and clear participant responsibilities. In 2026, the project will focus on prioritizing features, developing a more detailed design and preparing an issuance roadmap. The project team and Steering Committee will consolidate the findings, further technological experiments and accumulated work into a recommendation document for submission to the Governor of the Bank of Israel toward the end of the year.

The Central Bank of Seychelles (CBS) has published two reports assessing the banking sector’s exposure to climate-related financial risks, finding that expected losses remain low under typical conditions but that the sector is exposed to highly asymmetric physical risks. The assessment links climate hazards, geographic exposure and stress-testing techniques to examine how climate shocks could affect bank solvency, with tail events transmitted through lower GDP, higher borrower default probabilities, weaker profitability, lower capital ratios and higher recapitalisation needs. The first report finds that climate risks are spatially concentrated, with southern Mahé emerging as a key vulnerability where higher precipitation and wind intensity overlap with mortgage and tourism exposures, while northern and central districts carry systemic relevance because of concentrated economic activity. The preliminary damage assessment shows negligible losses for most simulated events, but extreme outcomes could produce losses of up to about SCR322 million under SSP2-4.5 and SCR82 million under SSP5-8.5, with the higher SSP2-4.5 maximum attributed to an isolated severe simulated event rather than a systematically higher risk profile. The second report, based on the top 25 loan facilities of two major banks as at end-March 2026, identifies SCR3.01 billion in combined credit exposure and finds that more than 92% of the analysed top-tier loan portfolio is in areas highly susceptible to tidal flooding and long-term sea-level rise. SCR1.64 billion, or 54% of the analysed debt, is classified as critical risk, while all loans in the high and critical risk categories reportedly lack insurance coverage against physical climate events. The highest sectoral exposures are tourism at about SCR574 million, commercial development at about SCR381 million and telecommunications, computer and information at about SCR340 million, with key geographic hotspots in Roche Caiman, Baie Ste Anne and Bel Air. CBS identifies improved geospatial data, broader loan-book coverage, integration of hotspot findings into macroprudential policy and work to close the insurance gap as next steps.

The United States Senate confirmed Kevin M. Warsh as Chairman of the Board of Governors of the Federal Reserve System for a four-year term, by a 54-45 vote. Warsh, who previously served as a Federal Reserve Governor from 2006 to 2011, will succeed Jerome H. Powell as chair once the formal transition is completed. The Federal Reserve Board separately named Powell as chair pro tempore after his term as chair concluded and while Warsh’s swearing-in remains pending.

The United States Senate Committee on Banking, Housing, and Urban Affairs advanced H.R. 3633, the Digital Asset Market Clarity Act of 2025, by a bipartisan 15-9 vote, moving the digital asset market-structure bill to the full Senate. The bill seeks to clarify federal oversight of digital assets, including when crypto tokens are treated as securities, commodities or otherwise, and to bring digital asset activity under clearer market, consumer protection and enforcement rules. It would also extend Bank Secrecy Act treatment to digital commodity exchanges, brokers and dealers, and require joint Securities and Exchange Commission, Commodity Futures Trading Commission and Treasury rules for stablecoin rewards. The committee vote followed months of negotiations and reflected continued divisions over the bill’s safeguards. All committee Republicans and two Democrats supported the bill in committee, but negotiations are expected to continue before any floor vote. A central compromise would prohibit passive, deposit-like interest or yield on payment stablecoin balances while allowing bona fide activity or transaction-based rewards. Opponents argued that the bill remained too weak on anti-money laundering controls, political-ethics restrictions, state-level fraud protections and risks to the banking system, while banking groups continued to press for tighter limits on interest-like stablecoin rewards.

The Federal Deposit Insurance Corporation released a staff study of deposit flows at Silicon Valley Bank, Signature Bank and First Republic Bank, using transaction-level data to analyze depositor behavior before and after the spring 2023 failures. The study finds that all three institutions experienced deposit runs that were unprecedented in speed and scale, with Silicon Valley Bank losing 60 percent of its March 6 domestic deposits by March 17, Signature Bank losing 58 percent of deposits, and First Republic Bank losing 36 percent, or 54 percent excluding the USD 30 billion consortium deposit made on March 16. The analysis identifies uninsured balances and very large depositors as the main drivers of run propensity. Top depositors, defined as the largest 0.5 percent of depositors at each bank, held 39 percent of total deposits at Silicon Valley Bank, 62 percent at Signature Bank and 50 percent at First Republic Bank on March 6, and roughly two-thirds or more of top depositors at each bank ran by March 17. Fully insured retail deposits did not run and in some cases increased, while business deposits, active escrow deposits and, at Signature Bank, passive escrow deposits fell sharply. Most outflows moved through wire transfers, and many depositors continued to submit new wires after the Silicon Valley Bank and Signature Bank bridge banks opened and after the systemic risk exception extended full deposit insurance coverage to all deposits at those two failed banks.

The United States House Committee on Financial Services advanced a bill that would require major financial supervisory agencies to review whether their technology systems, supervisory tools and data infrastructure are adequate for real-time oversight of regulated firms. The measure, the Fostering the Use of Technology to Uphold Regulatory Effectiveness in Supervision Act, H.R. 8278, was advanced to the full House by a 52-0 recorded vote. Within 180 days of enactment, each covered agency would have to assess the challenges posed by its current technology and review its procurement rules for acquiring or developing new technology systems. The agencies would then submit a joint report to Congress within 18 months after completing those assessments, and every five years thereafter. The report would cover supervisory hardware and software, procurement practices, technology staffing, information collection processes, market and technology trends, interagency information sharing, estimated data-sharing costs for supervised entities, and planned technology upgrades. Covered agencies include the Federal Reserve Board, Bureau of Consumer Financial Protection, Federal Deposit Insurance Corporation, Department of the Treasury, Office of the Comptroller of the Currency, Financial Crimes Enforcement Network, Federal Housing Finance Agency and National Credit Union Administration.

The Bank of Canada has set out how artificial intelligence could affect Canada’s productivity, labour market, inflation outlook and financial system, while stressing that adoption remains at an early and uneven stage. In remarks by External Deputy Governor Michelle Alexopoulos, AI was framed as a potential general-purpose technology that could raise productivity and living standards if adoption broadens, but with material uncertainty over its speed, scale and economic effects. The speech noted that AI-related investment by top US technology firms rose from about USD 200 billion in 2024 to about USD 400 billion in 2025, while Canadian business use of AI increased from about 3% in 2022 to around 12% in 2025. Adoption is concentrated by sector, with more than 30% of finance and insurance firms using AI compared with 1.5% in accommodation and food services. The Bank is already incorporating limited productivity gains into its projections and estimates of potential output, but does not see evidence of large-scale worker displacement. Almost 90% of Canadian businesses using AI reported no effect on staffing, while 4% reported job creation and about 6% reported employment declines linked to AI use. The speech also highlighted financial stability risks from possible overinvestment and overvaluation in AI-focused equities, as well as increased cyber risk. Within the Bank, AI supports forecasting, sentiment analysis, data processing and financial stability monitoring, but does not make monetary policy decisions.