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DBRS Warns Of Middle East Risks For Greek And Cypriot Banks’ Key Sector

by THEFUTURE.TEAM

April 1, 2026

Rising Geopolitical Risks And Economic Vulnerabilities

DBRS said rising geopolitical tensions in the Middle East increase risks for Greece and Cyprus, citing their exposure to shipping and tourism. The assessment highlights sector dependence as a key vulnerability in both economies.

Impact On Economic Activity And Banking Systems

Despite recent resilience in Cyprus, ongoing volatility is affecting economic activity and the banking sector. The report, titled “Middle East Tensions Heighten Risks for Greek and Cypriot Banks’ Shipping and Tourism Exposures,” compares risks across both countries and identifies areas of exposure.

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Tourism And Shipping: The Economic Double-Edged Sword

Tourism and shipping account for a larger share of economic activity in Cyprus and Greece than in most EU countries. In Cyprus, these sectors represent 6.6% of gross value added, compared with 7.3% in Greece and an EU average of 2.9%. Beyond direct activity, tourism supports transport and leisure services, influencing consumption and broader economic output. According to DBRS, banks in both countries have above-average exposure to these sectors, increasing credit risk in the event of a prolonged downturn.

Differentiated Exposure: Cyprus Versus Greece

Exposure differs between the two banking systems. Greek banks hold a larger share of internationally secured shipping loans, while Cypriot banks have greater exposure to tourism-related activity. This makes Cyprus more sensitive to changes in travel demand. Both systems maintain profitability and capital buffers that may support performance under pressure.

Economic Ripple Effects And Sectoral Vulnerabilities

A decline in tourism flows would affect small and medium-sized businesses, household income, and real estate values. These factors are linked to asset quality in Cypriot banks. Early indicators point to higher cancellation rates and weaker travel demand in Cyprus, reflecting its proximity to regional tensions. Greece may see a more limited short-term impact due to lower exposure and potential diversion of tourism demand from affected regions.

Maintaining Profitability In A Challenging Environment

Bank profitability in both countries remained above the EU average as of the fourth quarter of 2025. Capital levels in Cypriot banks remain strong, while Greek banks continue to align with broader European benchmarks. Asset quality has improved, with non-performing loan ratios in transportation and storage close to 0% in 2025, compared with an EU average of 2.3%. In lodging and food services, non-performing loans stood at 2.1% in Greece and 0.7% in Cyprus, both below the EU average of 5%.

Sectoral Exposure And Wider Banking Implications

Data from the European Banking Authority show that transportation and storage accounted for 19.8% of loans to non-financial corporations in Greece and 11.2% in Cyprus in 2025, compared with an EU average of 5.5%. Exposure to lodging and food services reached 11.1% in Greece and 21.2% in Cyprus, exceeding the EU average of 2.6%.

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Meta’s $18 Billion Settlement Limits State Claims Over Children’s Data

by News Editor

August 28, 2026

Meta’s $18 billion settlement with attorneys general from 29 U.S. states includes a provision limiting future state claims over the company’s use of children’s data for age-assurance systems.

Under the agreement, Meta must develop, train and begin testing a system to identify users under 13 within a year of the settlement taking effect. The company already uses AI-based age-detection tools, although the agreement does not require the new system to use AI.

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States Agree To Limits On Future Claims

The Children’s Online Privacy Protection Act (COPPA) generally restricts the collection and retention of personal data from children under 13. Under the settlement, the 29 state attorneys general agreed not to bring past, present or future claims under COPPA or similar state laws over the specified use of children’s data.

Meta will not be permitted to use information from users under 13 for advertising, marketing or algorithmic optimisation.

Federal Enforcement Remains Unclear

COPPA is primarily enforced by the Federal Trade Commission, which is not a party to the agreement. That leaves open the possibility of separate federal action over how Meta collects or uses children’s data.

Another issue is whether Meta can keep age-assurance data isolated from its other systems. An independent auditor will monitor compliance, but the settlement does not fully specify what data Meta can retain for training, how long it can be stored or whether derived insights can be used elsewhere.

Legal Risks Remain

Joshua Wurtzel, a partner at Schlam Stone & Dolan, said states could still pursue claims if Meta uses the data outside the settlement’s limits. Such cases could depend on how those limits are interpreted.

Peter Jackson, a data and intellectual property attorney at Greenberg Glusker, said the provision could “disincentivize future enforcement actions.”

The agreement gives Meta greater legal certainty around using children’s data for age assurance, but questions remain over federal enforcement, data retention and secondary use.