{"id":35713,"date":"2026-05-08T14:25:12","date_gmt":"2026-05-08T14:25:12","guid":{"rendered":"https:\/\/www.europesays.com\/europe\/35713\/"},"modified":"2026-05-08T14:25:12","modified_gmt":"2026-05-08T14:25:12","slug":"ecbs-lagarde-issues-stability-warning-on-euro-stablecoins-australian-regulator-joins-imf-in-sounding-alarm-on-ai-risks","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/europe\/35713\/","title":{"rendered":"ECB\u2019s Lagarde issues stability warning on euro stablecoins; Australian regulator joins IMF in sounding alarm on AI risks"},"content":{"rendered":"

Today\u2019s need-to-know storiesECB\u2019s Lagarde issues stability warning on euro stablecoins<\/p>\n

European Central Bank president Christine Lagarde has questioned the case for euro-denominated stablecoins, warning that they could threaten financial stability and create risks for the implementation of monetary policy.<\/p>\n

In a speech<\/a> on Friday, Lagarde said such instruments might cut financing costs in the euro area and expand the currency\u2019s international reach, but argued the risks were \u201csignificant\u201d.<\/p>\n

\u201cThey outweigh the short-term gains in financing conditions and international reach that euro-denominated stablecoins might provide,\u201d she said. \u201cIf we want to strengthen the international appeal of the euro, stablecoins are not an efficient way of doing so.\u201d<\/p>\n

Stablecoins, crypto tokens designed to hold a steady value and mostly pegged to the US dollar, have grown as an alternative to conventional cross-border payment systems. <\/p>\n

Their rise has fuelled debate over whether Europe should develop euro-denominated versions of the instruments.<\/p>\n

\u201cThe best solution remains the same,\u201d she said. \u201cMore integrated capital markets through the savings and investments union, and over time a safe asset base that matches the scale of our ambitions for the euro\u2019s international role.\u201d<\/p>\n

Australian joins IMF in sounding alarm on AI risks<\/p>\n

Australia\u2019s corporate regulator has warned financial services groups to move quickly to strengthen cyber defences against risks posed by the latest AI models such as Anthropic\u2019s Claude Mythos.<\/p>\n

The Australian Securities and Investments Commission said in a letter<\/a> to the industry that cyber security standards must keep pace with emerging AI capabilities, particularly systems with advanced coding skills that may be able to identify vulnerabilities at speed.<\/p>\n

\u201cCyber risk has entered a new era, the advent of frontier AI models creates opportunity but also materially increases risk, with the ability to expose vulnerabilities faster than many realise,\u201d said Simone Constant, ASIC commissioner.<\/p>\n

\u201cDo not wait for perfect clarity to address the threat posed by new AI models. Instead, act now, and act with discipline, to strengthen the cyber resilience fundamentals that underpin your business.\u201d<\/p>\n

The warning follows a separate alert<\/a> from senior officials at the IMF, who said the latest AI models could create \u201ccorrelated failures\u201d across the financial system and turn cyber incidents into a \u201cpotential macro-financial shock\u201d.\u00a0<\/p>\n

Germany shifts on AT1 bonds<\/p>\n

Germany\u2019s financial regulators have softened their stance on planned changes to banks\u2019 use of Additional Tier 1 bonds, signalling support for a compromise that would strengthen the debt instrument while preserving its role in bank capital.<\/p>\n

The Bundesbank and BaFin had previously proposed simplifying capital rules by limiting AT1 bonds to loss-absorbing buffers used when a bank is being wound down.<\/p>\n

Under current rules, lenders can also count the instruments towards the capital they need to keep operating normally.\u00a0<\/p>\n

Removing that option would have forced banks to replace AT1 bonds with more expensive equity.<\/p>\n

A Bundesbank spokesperson told Bloomberg that the central bank was now open to a \u201ccompromise\u201d that would allow banks to continue using AT1 bonds to meet going concern capital requirements.<\/p>\n

The earlier proposals had drawn strong opposition from banks, including German lenders that rely on the roughly $280bn market as a source of capital. Regulators in some other countries had also objected.<\/p>\n

ECB\u2019s Schnabel warns Iran war could raise inflation <\/p>\n

European Central Bank executive board member Isabel Schnabel has warned that the Iran war has increased the risk of higher inflation in the Eurozone, adding to expectations that the ECB could raise interest rates as soon as next month.<\/p>\n

Schnabel said rising energy prices were beginning to influence behaviour among companies and households, with more businesses planning price increases despite weak demand from consumers.\u00a0<\/p>\n

\u201cIf the energy price shock broadens, monetary policy will need to tighten to contain the risk of second-round effects threatening medium-term price stability,\u201d she said at an event in London. \u201cThis risk has increased in recent weeks.\u201d<\/p>\n

She added that higher fuel prices could feed through to the wider economy more quickly than during the 2021 to 2022 inflation surge because \u201cmemories of that painful inflation episode are still fresh\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"Today\u2019s need-to-know storiesECB\u2019s Lagarde issues stability warning on euro stablecoins European Central Bank president Christine Lagarde has questioned…\n","protected":false},"author":2,"featured_media":35714,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2388],"tags":[1858,2912],"class_list":{"0":"post-35713","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-european-central-bank","8":"tag-european-central-bank","9":"tag-need-to-know"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/35713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/comments?post=35713"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/35713\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media\/35714"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media?parent=35713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/categories?post=35713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/tags?post=35713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}