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The Federal Reserve's latest semi-annual Financial Stability Report cites geopolitical risks and the oil shock precipitated by the war in the Middle East as the top worries of survey respondents; artificial intelligence and private credit have also become prominent concerns. Three-quarters of respondents said geopolitical risks were their top concern; ​the oil shock was cited by 70%. Half of survey respondents identified AI and private credit as potential threats to financial ​stability. The Fed said the risks to financial stability from private credit appear "limited and manageable." 

 

Federal Reserve

Reuters

The U.S. Chamber of Commerce says that countries have only a “finite” window to respond to Chinese policies that are deepening reliance on its supply chains and harming the global economy. The U.S. Chamber says China‘s industrial policy is becoming more systemic and pervasive, extending across all layers of production, and these domestic dynamics are ushering in a new phase of global impact, characterized by accelerating trade dominance and the rapid global expansion of Chinese firms. 

 

Financial Times

U.S. Chamber of Commerce

The U.S. Treasury Department is urging banks to monitor for potential Iranian money laundering activities. The move aims to disrupt sanction-evasion tactics, particularly oil smuggling through shell companies and cryptocurrency networks. Banks are advised to flag oil labelled as "Malaysian blend" to disguise its Iranian origin, missing or falsified shipping documents, or ship-to-ship oil transfers that obscure where cargo came from. A report from the Treasury's Financial Crimes Enforcement Network indicates that Iranian-linked oil firms conducted approximately $4bn in transactions in 2024, with shipping companies based in Iraq, the UAE and Hong Kong - which are all connected to transporting sanctioned Iranian oil - processing about $707m through U.S. accounts.

 

AP News

Pablo Hernandez de Cos, general manager of the the Bank for International Settlements (BIS), has told Japan's Nikkei newspaper that countries must keep fiscal spending targeted and temporary, cautioning that broad-based and persistent stimulus ‌could increase inflationary risks and compel central banks to raise interest rates. "In recent weeks, market ​sentiment has been buoyant, driven by optimism regarding artificial intelligence (AI) developments and the expectations of ​a rapid resolution to the conflict in the Middle East. If these expectations prove wrong, I can easily see the potential for abrupt market corrections," de Cos said. 

 

Reuters

The U.S. and ‌18 other countries including Japan, South Korea, Singapore and Australia have agreed not to impose duties on e-commerce after no deal was reached to end deadlock with Brazil. Turkey, which had previously been against a four-year extension of a global deal, dropped its opposition. "This group of Members remains committed to do what we can to provide to businesses and consumers a measure ‌of predictability ⁠and certainty in the absence of the multilateral E-Commerce Moratorium," a document dated May 7 said. The document invited other members to join the agreement. Sabina Ciofu, the international policy and strategy lead at U.K. trade association techUK, said the failure to secure a multilateral agreement was deeply concerning. "If WTO ​members cannot maintain consensus around one ​of the longest-standing and most ⁠widely supported rules underpinning digital trade, serious questions will continue to grow about the organisation's relevance," Ciofu said.

 

Reuters

U.S. businesses want the Trump administration to engage with the European Commission over rules that would require companies to prove their products were not at fault if a customer alleged injury. 

 

Financial Times

Pennsylvania has sued the artificial intelligence company behind Character.AI to stop its chatbot from posing as doctors. Gov. Josh Shapiro said the lawsuit against California-based Character Technologies is the first of its ‌kind by a U.S. governor. "We will not let AI companies mislead vulnerable Pennsylvanians into believing they’re getting advice from a licensed medical professional," Shapiro said. "We’re taking Character.AI to court to stop them." The state's medical board wants the operators of Character.AI to "be ordered to cease and desist from engaging in the unlawful practice of medicine and surgery," according to the Pennsylvania  complaint. The platform has more than 20 million users and "is different from other systems in that users can create characters that can be trained to have a specific personality when engaged in a conversation with other users," the complaint said.

 

Axios

NBC News

Reuters

Ontario, Canada-based software developer Rave has filed an antitrust lawsuit against Apple, claiming ​the iPhone maker removed its app for shared viewing of ‌video content off the Apple App Store after introducing a competing product called SharePlay. Rave wants reinstatement into the App Store and "hundreds of millions of dollars" in damages, ​according to the complaint filed in U.S. federal court in New Jersey.

 

Reuters

The New York State Common Retirement Fund is re-evaluating its stake in TotalEnergies following the French firm's decision to accept $1bn from the Trump administration to exit U.S. offshore wind power.

 

Financial Times

Increased sabotage threats since Russia’s full-scale invasion of Ukraine have put Europe's power networks on alert. Utilities and governments across large parts of Europe’s eastern flank are bolstering electricity networks that weren’t designed to withstand missile strikes, cyber-attacks or drone assaults. NATO has said critical infrastructure is a security priority and wants more coordination and greater urgency in crisis readiness. “We are preparing for a much worse security environment,” said James Appathurai, NATO’s top adviser on cyber and hybrid defences. “We need energy, the military needs energy, people need energy. Therefore it’s going to be in the sight lines.”

 

Bloomberg

Chinese offshore M&A transactions totalled $9.6bn in the first three months of this year, rising for the fifth consecutive quarter, according to new data from U.S. research company Rhodium Group.

 

Financial Times

Victims of last year's devastating floods in Indonesia's Sumatra have filed a lawsuit urging the government to declare national disaster status for three affected provinces. The suit, submitted to the state administrative court, includes seven residents from Aceh, North Sumatra, and West Sumatra, who are demanding immediate action from the government. Diki Rafiqi, one of the petitioners, said the existing reconstruction process has ​now stalled because ⁠of the limited budget allocated by the provincial governments. The petitioners are also seeking a moratorium on new forest use permits until the land is rehabilitated, underscoring the need for reconstruction funding and support for the 1,200 lives lost and 300,000 homes damaged during the disaster.

 

U.S. News