Category: 3. Business

1. What’s a conversation we’re not having enough when it comes to AI and the future of work? 

There is no shortage of headlines and articles on AI and the future of work. But too often, this discourse focuses solely on job losses, coupled with sensational headlines. While technologies continue to evolve rapidly, meaning that we can’t yet drew firm conclusions, it is also true that we need to look at the labour market effects much more carefully. This entails understanding how AI impacts not only the quantity of jobs but also the quality of them and the nature of work, in terms of wages, working conditions and rights more broadly. The larger issue of inequality is also crucial.  

2. In your view, what are the current and potential future impacts of automation on developing economies? 

Currently, the impact of digitalization and AI in developing economies is less than in advanced economies, primarily due to the digital divide and differences in the structure of economies. While the possible negative effects on jobs are less (but not zero), we also know, as shown by ILO research, that the digital divide prevents developing countries from taking advantage of the benefits from new technologies, such as AI.  

But there are two caveats to this view that developing countries are not being affected by AI. First, digital tools and platforms are growing rapidly, even if the use of generative AI is more confined to small part of the population – see the rise of digital payment systems, such as M-PESA in Eastern Africa, and the rapid emergence of digital labour platforms, both location-based and online, which are creating opportunities and challenges in all countries. Second, emerging technologies, such as AI, continue to evolve so we cannot assume that the situation today will hold in the coming months and years. We need to continue to monitor the situation.  

3. How do these impacts influence groups in vulnerable situations, such as women, youth, and migrants? 

A key lesson from centuries of technological change is that there are both winners and losers as economies and labour markets adjust. ILO research has shown that women are more susceptible to the automation effects of AI due to their overrepresentation in occupations that are most exposed, such as administrative jobs. Recent data on actual labour market trends (as opposed to potential effects) is telling us that we should be worried about how generative AI is impacting young people – evidence is emerging to suggest that there is a more negative effect of AI on young labour market entrants in such countries as the US. At the same time, there are range of use cases that can help certain groups access new learning and employment opportunities. For example, under the  PROSPECTS programme, the ILO is supporting young people in remote areas of Kenya through digital skills training and mentoring programmes to access online job opportunities. 

4. While we talk about the quantity of jobs impacted by AI, what would you say about the quality of jobs impacted? 

As already mentioned, we need to focus on not only implications of AI for job quantity but quality as well, which is where the largest effects are likely to emerge. AI impacts tasks and won’t eliminate most jobs entirely. But these changes can lead to effects on wages, depending on how demand for the occupation shifts, and working conditions due to the impact of AI in the workplace.  

We already see the use of algorithmic management tools, which are getting supercharged by AI, for recruitment, allocating tasks, monitoring and evaluating workers. While this has the potential to improve productivity, it poses challenges in terms of workers’ agency and the nature of their jobs. Key is transparency on the use of these tools, matched by dialogue to ensure that new technologies can be beneficial to both the enterprise and their workers.  

5. There’s often a regional divide in how AI is deployed and its benefits are distributed. How can we bridge that gap—both nationally and globally? 

A digital divide exists both within and between countries due to differences in access to digital infrastructure and skills. The share of the population using the Internet in 2024 reached 93 per cent in high-income countries compared with just 27 per cent of the population in low-income economies. Even in advanced economies, such as in the European Union, access to AI is uneven with higher rates of adoption in richer countries and larger firms. Within countries, access to broadband (optic fibre) Internet and training programmes is more limited in rural areas. In response, greater investments are needed in infrastructure and skilling to ensure that these gaps are reduced. Support is also needed to ensure that there are opportunities for developing economies to build their own AI ecosystems in terms of both development and deployment of new technologies in different languages and adapted to country-specific contexts.   

The share of the population using the Internet in 2024 reached 93 per cent in high-income countries compared with just 27 per cent of the population in low-income economies.

6. What kind of policy frameworks do we need to ensure that AI benefits all workers? 

From an ILO perspective, the Decent Work Agenda remains key for assessing both the benefits and challenges arising from the development and deployment of AI. In practice, responding to the opportunities and challenges posed by AI will involve applying existing policies and regulations, while adapting and developing new strategies and governance frameworks where needed, in line with international labour standards and through social dialogue (e.g., to address the platform economy).  

There are three areas we need to look at: first, address the negative impact of AI through redeployment, social protection and active labour market policies (e.g., employment services); second, enhance digital skilling and upskilling to support access to new technologies, along with measures to assist small businesses to overcome the digital divide and take advantage of opportunities; and third, strengthen governance mechanisms to ensure rights are protected in the workplace (e.g., safeguarding against discriminatory algorithms). 

7. If you could deliver just one message to global policymakers about AI and employment, what would it be? 

AI is creating both new opportunities and challenges in the world of work and to ensure that the benefits are broadly shared, we need to assess the impact of AI on both the quality and quantity of jobs, and respond through employment policies and other measures, backed by the latest evidence and social dialogue.  

Prepared by Maciej Grodzicki, Urtė Kalinauskaitė, Benjamin Klaus, Chloe Larkou, Francesca Lenoci and Allegra Pietsch

Published as part of the Financial Stability Review, November 2025.

The US dollar assets and liabilities of euro area banks arise mainly from their capital market activities. Capital market activities are often characterised by short maturities and require daily marking to market and margining. These features may pose a liquidity risk to banks in the event of abrupt market movements. US dollar funding and hedging instruments provided by banks are also important for euro area corporates and non-bank financial institutions, especially when exchange rates move rapidly. This box presents the business rationale for euro area banks’ US dollar activities and aims to assess the associated financial stability risks.

US dollar activities are concentrated among euro area global systemically important banks (G-SIBs), which intermediate US dollars to other European parties. In contrast to other major currencies, US dollar activities relate almost exclusively to wholesale business.^[1] The breakdown of euro area banks’ US dollar assets and liabilities reveals the high weight of capital market activities relative to loans and deposits from the non-financial sector (Chart A, panel a). Other financial assets and liabilities, which include primarily the positive fair value of derivatives, are the largest balance sheet position denominated in US dollars. They are followed by repo borrowing, debt securities funding, holdings of debt securities and deposits taken from banks and other financial institutions.

Banks’ dollar-denominated credit exposures are largely limited to holding high-quality debt securities and lending to the non-financial corporate sector. Euro area banks’ debt securities holdings denominated in US dollars consist mainly of US Treasuries and agency mortgage-backed securities, followed by debt issued by non-US governments and financial institutions. These securities qualify as high-quality liquid assets. Euro area banks’ dollar-denominated lending is estimated to be close to €700 billion at the least (9.2% of the total loan book), with most of this going to non-euro area corporate and non-bank financial clients (Chart A, panel b).^[2]

Chart A

Capital markets business dominates in euro area banks’ US dollar activities

a) Dollar-denominated assets and liabilities of 48 euro area significant institutions, by bank type	b) Dollar-denominated securities holdings and bank lending of euro area banks
(Q4 2024, € trillions)	(Q4 2024, percentages)

The US dollar activities of euro area banks in capital markets represent a diverse set of financial services to the economy. Euro area banks, especially some of the G-SIBs, are present in US money markets, where they act as intermediaries by sourcing funding from money market funds and lending the proceeds to hedge funds on a secured basis.^[3] Euro area investment funds, life insurers and pension funds invest in dollar-denominated assets, despite their euro-denominated obligations to fund-shareholders or policyholders. Euro area banks facilitate these counterparties’ needs to mitigate the resulting currency risk by engaging in FX swaps, effectively receiving US dollars and paying euro to investment funds, insurance corporations and pension funds. Euro area banks partially hedge this currency risk by taking opposite positions with global banks (Chart B, panel a). These US dollar liabilities are not visible on bank balance sheets.^[4] Euro area banks also provide currency hedges to euro area exporters and importers, although such hedging trades are on a smaller scale than those associated with euro area financial investors. For instance, as of July 2025, banks are facilitating US dollar payments to non-financial corporations via currency swaps, primarily to stabilise such corporations’ import costs rather than to manage dollar-denominated revenue flows.

While asset-liability mismatch appears to be limited in extent, banks are nonetheless taking liquidity risk due to mismatches between counterparties providing and receiving funding. Some banks mitigate liquidity risks further by running maturity-matched repo books and do not use volatile short-term repos to fund illiquid long-term assets. However, these strategies do not fully eliminate liquidity risk. While banks hold sizeable quantities of high-quality liquid assets, dollar outflows in an extreme scenario could exhaust their capacity to raise cash through repos, FX swaps and the sale of such assets.^[5] The value of liquid assets may also decline in these circumstances, exacerbating liquidity pressures.^[6] Although net outflows of US dollars could be covered by US dollar liquid assets in the long term, the net outflows are concentrated in the short term. Some banks may require additional funding in US dollars or rely on inflows of US dollars from maturing short-term assets to remain liquid during financial stress (Chart B, panel b). However, collecting these cash inflows would imply that they reduce US dollar funding to counterparties.

Chart B

Euro area banks’ US dollar intermediation activities

a) Euro area banks’ net dollar-denominated FX swap and CIRS positions	b) Cumulative contractual gap between US dollar inflows and outflows to/from euro area banks
(Q2 2025, € billions)	(Q4 2024, percentages of US dollar HQLA)

Maintaining adequate balance sheet capacity is necessary to enable banks to act as shock absorbers. If euro area banks reduce their dollar intermediation, their counterparties could face difficulties funding or hedging dollar-denominated investments and may need to sell such assets. Capital and US dollar liquidity buffers provide the balance sheet space required by banks to offer financial services in US dollars to their counterparties in times of financial stress. Capital headroom could be needed to absorb the increase in capital requirements associated with higher currency volatility and counterparty credit risk. Although liquidity risk may not materialise in banks’ own balance sheets and there is no regulatory requirement for banks to match the currencies of liquid assets to the currencies of liabilities, banks should hold liquid US dollar assets to counterbalance outflows and act as a stabilising intermediary.

Prepared by Paolo Alberto Baudino, Oscar Schwartz Blicke and Maurizio Michael Habib

Published as part of the Financial Stability Review, November 2025.

Hedge funds represent a relatively small segment of the euro area investment fund sector and comprise both AIF and UCITS hedge funds. The total assets of euro area hedge funds stood at around €660 billion in the third quarter of 2025, equivalent to roughly 3% of the investment fund sector’s total assets. In the EU, hedge funds may fall either under the Alternative Investment Fund Managers Directive (AIFMD)^[1] or the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive.^[2] AIF hedge funds are usually marketed to wealthy investors and are predominantly held by euro area investment funds. They offer limited liquidity, by allowing redemptions only quarterly or even annually (often with advance notice), for example, and by imposing lock-up periods on initial investments. By contrast, UCITS hedge funds are more accessible to retail investors and other non-bank sectors – with euro area households and insurance corporations each holding around 15% of the shares in such funds. As these funds often allow investors to redeem shares on a high-frequency basis, the sector is more exposed to fund share redemptions during market turmoil. UCITS hedge funds account for about 30% of the overall hedge fund sector in terms of shares issued (Chart A, panel a) as well as total assets.

Chart A

UCITS hedge funds exhibit higher retail participation and use derivatives more intensively than do AIF hedge funds

a) Investor base and shares issued by euro area hedge funds, by fund type	b) Euro area hedge funds’ financial leverage and gross derivatives exposure, by fund type	c) Gross derivatives exposures of euro area UCITS hedge funds and derivative type distribution
(Q3 2025; percentages, € billions)	(Q3 2025; total assets divided by shares issued, derivative gross notional divided by shares issued)	(Q3 2025, derivative gross notional divided by shares issued)

As UCITS hedge funds have relatively high derivatives exposure and leverage, they warrant attention from a financial stability perspective. Both UCITS and AIF hedge funds employ a wide range of investment strategies, including leveraged trades, to achieve positive absolute returns. Because of regulatory constraints on borrowings,^[4] UCITS hedge funds make less use of financial leverage than AIF hedge funds do, with a total assets/equity ratio of 1.3 for UCITS hedge funds versus 1.7 for AIF hedge funds. However, synthetic leverage through derivatives is more pronounced in UCITS hedge funds, with gross notional derivatives exposure reaching up to 12 times equity for fund categories such as global macro strategies (Chart A, panels b and c).^[5] In addition, UCITS hedge funds hold a lower proportion of highly liquid assets (e.g. cash and sovereign bonds) than AIF hedge funds do.^[6] This leaves them more vulnerable to liquidity risk from redemption shocks or margin calls. Although some research has been carried out on the performance of UCITS hedge funds, this box sheds light on their liquidity and leverage-related risks, given their importance for financial stability.^[7]

Procyclical flows and larger redemptions from leveraged funds in times of stress can lead to asset sales and mounting liquidity pressures during periods of high market volatility. Evidence from a panel of 457 UCITS hedge funds shows that their flows are procyclical, positively correlated with past returns (Chart B, panel a) and in line with the findings for other fund categories.^[8] Although the analysis does not indicate that leverage generally amplifies the flow procyclicality of UCITS hedge funds, it does show larger outflows from leveraged UCITS hedge funds in periods of market stress (Chart B, panel b). Since fund share redemptions may force funds to sell assets when markets are under pressure, leveraged funds could be required to close larger positions, thereby amplifying stress.

The use of derivatives by UCITS hedge funds can intensify liquidity pressures via margin calls. Derivatives positions, which can be used for hedging or for leverage, are subject to margin requirements. During periods of elevated price volatility and significantly negative returns, margin calls on these derivatives positions tend to increase (Chart B, panel c), further straining a fund’s liquidity.^[9] This exacerbates the challenges faced by leveraged UCITS hedge funds, as they have to manage liquidity to meet both margin calls and redemption requests simultaneously. Interaction between these factors can heighten liquidity strains and contribute to broader market stress under adverse market conditions.^[10]

Chart B

Flows into UCITS hedge funds tend to be procyclical, while margin calls may intensify liquidity risk

a) Average fund-level flows into euro area UCITS hedge funds, by lagged return level	b) Average fund-level flows into euro area UCITS hedge funds, by synthetic gross leverage level	c) Average fund-level daily posted variation margin of euro area UCITS hedge funds, by negative return level
(Jan. 2019-Oct. 2025; standardised values, percentages)	(Jan. 2019-Oct. 2025; standardised values, log of derivative gross notional as a percentage of TNA)	(Jan. 2020-Oct. 2025; percentages of TNA, percentages)

A robust stress-testing framework for leveraged UCITS hedge funds is essential to ensure their resilience and limit the risks to financial stability in turbulent market conditions. The combination of outflows and margin calls on derivatives positions can intensify liquidity pressures for UCITS hedge funds during periods of stress. This raises concerns about the ability of such funds to manage the challenges and contributes to broader financial instability. These dynamics highlight the need for strengthened risk management and comprehensive stress-testing practices to safeguard financial stability during episodes of market turmoil.

Finally, authorities should be equipped with suitable tools to limit excessive leverage in UCITS hedge funds and mitigate the build-up of risks during periods of market stress. While authorities have tools that enable them to contain excessive leverage in AIFMD-compliant funds, they do not have such tools for UCITS hedge funds. The Eurosystem suggests introducing discretionary powers that would allow authorities to impose stricter leverage limits on these funds when they pose risks to financial stability.^[12] It also recommends that all UCITS hedge funds should be required to report their leverage using the commitment approach.

Young professionals under 35 years are invited to submit essays on innovations in the nuclear fuel supply chain, with winners presenting at an IAEA conference in Vienna in October 2026.

The IAEA is inviting young professionals to submit innovative essays on nuclear fuel supply issues and prospects covering topics from uranium exploration to recycling of spent fuel. Winners will be invited to present their essays at the IAEA International Conference on Fuel Supply Chain for Sustainable Nuclear Power Development in Vienna on 13 to 15 October 2026.

Professionals can submit an essay on one of the following themes: 

• Meeting growing global demand for uranium resources.
• Advancing fuel engineering and production for innovative reactor technologies.
• Expanding spent fuel recycling to support a circular economy in the nuclear sector.

The deadline for submission is 10 January 2025. Shortlisted authors must submit a three-minute recorded presentation or video by 1 March 2026.

“We wish to encourage creative thinking about the fuel supply in the context of expanding nuclear power generation, including with advanced and innovative reactor concepts,” said Olena Mykolaichuk, Director of the IAEA Nuclear Fuel Cycle and Waste Technology Division. We are eager to see participation from women and professionals from developing countries, as well as experts in disciplines such as engineering, law, natural or social sciences who have a focus on the nuclear sector.”

The prospect of significantly increasing nuclear power generation by mid-century poses challenges across the nuclear fuel supply chain. This competition aims to highlight the career  opportunities for young professionals in these fields.

Winners will have the opportunity to present their essays and participate in the conference which provides a global forum for fuel supply professionals to explore current topics and innovations. All essay applicants will also be considered for roles in other segments of the Conference programme.

For more details about the competition please click here.

Well-functioning electricity markets can be an efficient tool for balancing supply and demand, coordinating operational decisions and signalling investment needs. As electricity systems transform to accommodate a broader range of technologies and growing power demand, effective market designs for secure operations and timely investment are essential, according to a new IEA report released today.

The report – Electricity Market Design: Building on strengths, addressing gaps – looks at how wholesale market designs and the policies that complement them are performing across Europe, the United States, Japan and Australia, and provides insights on how they can adapt to changing system needs. It finds that while short-term markets have performed well in supporting efficient and secure electricity dispatch, long-term markets have been less effective in meeting investment and risk-management needs.

Complementary mechanisms, such as capacity remuneration schemes and renewable support programmes, have played a significant role in advancing investment and policy objectives, but in some cases their design has contributed to system inefficiencies and higher costs, the report says.

Across the markets analysed, electricity has been securely supplied more than 99.9% of the time over the past five years. Short-term markets have been broadly effective in maintaining reliable and efficient operations even as systems become more complex. They have enabled efficient scheduling, transparent price formation and broad participation across a diverse set of resources and actors. In Europe, for instance, the day-ahead market processes more than 400 000 bids every hour across thousands of registered actors.

Long-term markets, however, suffer from low liquidity across most of the regions analysed. This limits how easily market participants can find opportunities to protect themselves against short-term price risks. In forward and futures markets, most trading happens no more than 2 years ahead of electricity delivery, far short of the horizons of 10 to 30 years typically required to finance new capital-intensive projects. Overall, long-term market gaps make it harder for market participants to manage price risks over the time frames needed for investing in new generation, storage and electrification projects.  

For needs that markets alone cannot meet, complementary mechanisms provide targeted support to bring forward new investment and maintain essential existing capacity. Across many regions, they have helped advance policy objectives such as resource adequacy and emissions reductions targets. These mechanisms have become a structural feature of electricity markets, helping to deliver large-scale, low-emissions generation and retain dispatchable and flexible resources which may operate less frequently with rising shares of variable renewables, while remaining essential for system security. 

Overall, the report finds that short-term markets have managed to remain effective, and their strengths should be preserved while refining their designs to reflect the needs of more dynamic and distributed systems. Long-term markets have shown several gaps, undermining investment conditions and risk management. Many market participants would benefit from reforms that increase the liquidity, duration and accessibility of long-term markets.

The report underscores the importance of taking a holistic view of wholesale electricity market design. The analysis highlights the benefits of evolving market designs and emphasises the need for transparent and predictable reform processes to maintain stakeholder confidence and support effective implementation.

[Bangkok, Thailand, November 26, 2025] At the 10th 5G Core Network Summit hosted by Informa Tech, George Gao, President of Huawei Cloud Core Network Product Line, delivered a keynote address calling on telco operators to capitalize on AI opportunities. Mr. Gao advocated for building an agent communication network featuring terminal service collaboration through network agentization. Huawei also released the Striding Towards the Intelligent World White Paper 2025 on cloud core networks at the summit, which illustrates seven core network development trends around intelligent terminals, service scenarios, and AI core networks, facilitating industry collaboration and innovation.

Mr. Gao emphasized that as terminals and service applications increasingly incorporate intelligent agent capabilities, networks must evolve to bridge ecosystem gaps.

First, we can use intent entry, network service agents, network capability agents, and network O&M agents to make the network agent-based. The agentized network supports the agent-to-agent (A2A) protocol and the model context protocol (MCP), allowing agents to communicate with each other. This brings more efficient and intelligent terminal and service collaboration. The intent entry interacts with the terminal-side agents, letting them invoke network agents exactly when needed.

Second, we can build an agent communication network across ecosystems. We can introduce A2A session management capabilities based on IP sessions, and expand the authentication mode from SIM card-based authentication to digital identity authentication and authorization.

Mr. Gao also proposed four strategic actions to speed the evolution of operator networks into AI core networks:

Intelligent Network Services

Leveraging AI agents, we can roll out various intelligent services on the core network. AI Calling is a prime example. By introducing AI capabilities to calling services, we can build an AI call assistant that can understand user intent, emotions, and contextual information, creating more intelligent and efficient call experiences. Based on the data channel (DC), we can support interactive calling, which facilitates closed-loop service handling during calls. In this new model, the familiar dial pad serves as an entry point for AI services.

Network Capability Productization

By productizing network capabilities, we can help operators shift from just selling traffic to selling premium service experiences. Huawei has defined five essential elements for effective experience monetization: definable experiences, guaranteed quality, marketable products, perceptible exclusive identity, and reliable service provisioning. With technologies such as media relay, we can greatly improve HD video penetration rates and third-party service experiences, and reshape operator’s business model.

Network O&M Autonomy

We can also introduce digital employees to advance network O&M autonomy, achieving high O&M efficiency and secure, high-stability networks. The AI core network uses key technologies such as agents, digital twins, and the industry’s first mixture-of-models (MoM) architecture facilitating intelligent scheduling and collaborative inference between fast inference models and deep reasoning models. With the fusion of these technologies, we can enable the AI core network to achieve single-domain autonomy and accelerate the evolution to level-4 autonomous networks.

Diversified Telco Cloud Computing Power

We can integrate AI computing resources into the telecom infrastructure. Through resource pooling and unified orchestration and scheduling, we can build one cloud for general computing and intelligent computing, accommodating hundreds of billions of agents and vast service traffic in the mobile AI era.

Mr. Gao concluded by stating that the introduction of AI Core is not only a technological advancement, but also a reconstruction of the entire industry ecosystem. Huawei is committed to continuous innovation, to help operators unlock new revenue opportunities and secure a stronger position in the market.