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EU Moves Forward With AI Act Despite US Pushback

Brussels is pressing ahead with the enforcement of its landmark AI Act, which includes new guidance on prohibited AI practices, despite threats from former US President Donald Trump regarding the regulation of American tech companies.

The AI Act is seen as the world’s most comprehensive AI regulation. On Sunday, the European Union began enforcing provisions that ban certain practices, including the creation of facial recognition databases through internet scraping. New guidance on how these rules should be applied will be released by the European Commission on Tuesday, with further provisions targeting high-risk AI applications, such as those in healthcare, to be rolled out by 2027.

The EU’s push for enforcement comes as US-based tech companies, supported by Trump’s administration, express concerns over the regulation. Trump has warned that the EU’s treatment of American firms could result in retaliation, particularly regarding fines imposed on companies like Meta and Google. Trump’s administration has also signaled a shift in the US stance on AI regulation, promoting a less restrictive approach, including the announcement of a $500 billion AI infrastructure project backed by SoftBank and OpenAI.

Despite this pushback, the European Commission is steadfast in its commitment to enforcing the AI Act. The law requires companies developing high-risk AI systems to be more transparent about their processes and undergo risk assessments. Non-compliance could lead to hefty fines or even a ban from the EU market.

Big Tech has raised concerns that the EU’s transparency requirements could stifle innovation, particularly rules allowing third-party inspections of AI models for risk assessments. Meta has been vocal about the “onerous” nature of these provisions. However, Brussels continues to assert its position as the global leader in trustworthy AI, even as it navigates increasing opposition from the tech sector.

Caterina Rodelli, an EU policy analyst at Access Now, suggests that the approach to implementing the AI Act could shift under the new US administration. “There’s a risk that regulators could relax the rules, potentially undermining their effectiveness,” she noted.

While the EU’s recent bans have been clear, much is still to be determined in negotiations over the Code of Practice for general-purpose AI, which will affect major AI models such as Google’s Gemini and OpenAI’s GPT-4. These discussions, which involve hundreds of stakeholders, are set to conclude in April.

Central Bank Of Cyprus Balance Sheet Reflects Strong Eurosystem Position

Overview Of Financial Stability

The Central Bank of Cyprus (CBC) has released its latest balance sheet, reaffirming its steadfast role within the Eurosystem. The balance sheet, featuring total assets and liabilities of €29.545 billion, underscores the institution’s stable financial posture at the close of January 2026.

Asset Allocation And Strategic Holdings

Governor Christodoulos Patsalides issued the balance sheet, which details the CBC’s asset composition under the Eurosystem framework. Notably, the bank’s gold and gold receivables amounted to €1.635 billion, providing a significant hedge and stability to its balance sheet. Additional asset categories include claims on non-euro area residents denominated in foreign currency at €1.099 billion, while claims on euro area residents in both foreign and domestic currency add further depth to its portfolio.

The most substantial asset category, intra-Eurosystem claims, reached €19.438 billion, an indication of the CBC’s deep integration with its European counterparts. Furthermore, euro-denominated securities held by euro area residents contributed €6.587 billion. Despite a marked emphasis on these areas, lending to euro area credit institutions in monetary policy operations recorded no activity during the period.

Liability Structure And Monetary Policy Implications

On the liabilities side, banknotes in circulation contributed €3.218 billion. Liabilities to euro area credit institutions associated with monetary policy operations were notably the largest single category, totaling €17.636 billion. Supplementary liabilities included those to other euro area residents, which aggregated to €4.989 billion, with government liabilities playing a predominant role at €4.754 billion.

Other liability items, such as claims related to special drawing rights allocated by the International Monetary Fund at €494.193 million, and provisions of €596.571 million, further articulate the CBC’s exposure. Revaluation accounts stood at €1.643 billion, and overall capital and reserves were confirmed at €333.822 million, completing the picture of a well-capitalized institution.

Conclusive Insights And Strategic Alignment

The detailed breakdown illustrates the CBC’s sizeable intra-Eurosystem exposures, reinforcing its central role within Europe’s monetary landscape. With an asset-liability balance maintained at €29.545 billion, the CBC’s financial position remains robust, indicating a commitment to structural stability and strategic risk management.

This fiscal disclosure not only provides transparency into the CBC’s operations but also serves as a benchmark for comparative analysis among other central banks within the Eurosystem, highlighting the intricate balance between asset liquidity, regulatory oversight, and monetary policy imperatives.

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