Risk Channel delivers the latest, most relevant and useful business intelligence to key decision makers and influencers, each weekday morning.

OpenAI has issued a warning regarding its forthcoming artificial intelligence models, indicating they could present a "high" risk to cybersecurity as their capabilities evolve rapidly. The company noted that the models might not only develop zero-day exploits but could also assist in sophisticated intrusion operations aimed at significant effects. To mitigate these risks, OpenAI is investing in bolstering its cybersecurity measures and is creating an advisory group, the Frontier Risk Council, to collaborate with cybersecurity experts on these challenges.

 

Reuters

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The European Central Bank (ECB) is considering abolishing a key layer of bank capital that was introduced in the wake of the global financial crisis. Europe’s top banking regulator has proposed changing the design of additional Tier 1 capital to ensure it can absorb losses before banks fail and provide extra clarity to lenders and investors. Bloomberg notes that the  ECB has also suggested other changes, including merging capital buffers, aligning the MREL framework, and expanding the existing regime for smaller banks to include more lenders and simplifying their applicable rules.

 

Bloomberg

Financial Times

Financial Conduct Authority chief executive Nikhil Rathi says the UK watchdog plans to enhance SME lending, reform mortgage rules, and support digital finance in a bid to boost economic growth and competitiveness. In a letter to Prime Minister Keir Starmer, Rathi said the regulator will consider revising pension fee caps, accelerate company listings on the London Stock Exchange, and reduce mortgage-approval red tape. The government has urged regulators to support growth and the FCA reforms align with ministers’ efforts to encourage pension funds to invest more in unlisted companies, early-stage ventures, infrastructure and green energy. The FCA also plans to remove the current seven-day research waiting period for IPOs.

 

Financial Times

Reuters

The Times

Italian regulators have launched antitrust probes into Swatch and Citizen Watch over alleged retail price fixing by their authorised distributors. Authorities suspect the watchmakers imposed online pricing restrictions and retaliated against non-compliant retailers. Swatch has confirmed inspections at its Tissot and Mido Italy offices and said it is cooperating fully.

 

Reuters

EU finance ministers will today push for a cull of financial services laws after bowing to pressure from bank bosses who are complaining about a reluctance to change complex restrictions.

 

Financial Times

European Central Bank president Christine Lagarde has said that rate-setters will probably lift their growth forecasts for the euro zone when they meet next week, in a sign that the region's economy is proving resilient to trade tensions. "In the last projection exercises, we have upgraded our projections," Lagarde told a Financial Times event. "My suspicion is that we might do that again in December." Lagarde identified sentiment indicators, including manufacturing and employment data, as signs of resilience.

 

Financial Times

Reuters

Wall Street Journal

A bipartisan group of state attorneys general in the United States has warned 13 companies including Microsoft, Meta, Google and Apple that their chatbots' "delusional outputs" could be violating state laws. In a letter made public on Wednesday, dozens of attorneys general said the chatbots "encouraged users' delusions," precipitating mental health risks for children and adults. They urged the companies to allow independent audits of their products, adding that state and federal regulators should be able to review them.

 

TechCrunch

Reuters

Amazon is to pay €510m ($582m) to settle a tax dispute in Italy, in one of a number of cases involving the company there. Reuters reports that Milan's prosecutors are however in disagreement with the settlement between the tax collection agency and the company, and plan to continue their criminal investigation, according to sources. Amazon criticised the Italian regulatory environment, saying: "We will forcefully defend our position on the potential ungrounded criminal case . . . Unpredictable regulatory environments, disproportionate penalties, and protracted legal proceedings are increasingly affecting Italy's attractiveness as an investment destination."

 

Reuters

UK tax authority HMRC has launched a new reward scheme for whistleblowers, offering higher payouts to encourage reporting of unpaid tax. Senior officials believe this could lead to the recovery of significant amounts of unpaid tax. However, the scheme is based on an untested hypothesis and raises concerns about the risks for informants, including potential professional blacklisting. Nick Barnard, a partner at law firm Corker Binning, noted that the scheme's success is uncertain and could lead to questions about HMRC's resource allocation if it fails. The scheme, he warns, "is not a guaranteed win."

 

The Times

Dutch insurer Aegon has announced the relocation of its headquarters and legal seat to the United States, and a rebrand as Transamerica. Aegon CEO Lard Friese said: “We are ready for the next frontier: to fully capture the opportunities in the largest life insurance market in the world: the US,” adding: “Aegon's ambition is clear: we want to become a leading US life insurance and retirement group.” The transition will impact around 250 employees and is expected to be completed by January 2028. The group's shares will remain listed in Amsterdam.

 

NL Times

Pfizer is to cut more than 200 Swiss jobs as part of a multi-year cost reduction programme. The drugmaker will reduce its workforce in Switzerland to around 70 from 300 by the end of this year. The job cuts follow a broader downgrade of the Swiss unit within the company.

 

Reuters

Bloomberg

Poland is set to begin construction on its inaugural nuclear power plant following the European Union's approval. The project is expected to benefit from around 60bn zloty ($16.5bn) in public aid and will have a total estimated cost of 192bn zloty. Agreements with US firms Westinghouse Electric Co. and Bechtel Group Inc. are anticipated to be finalised for the plant's development, which will be located along the Baltic Sea coast.

 

Bloomberg

Prada will release a limited-edition €800 sandal collection in February 2026 that will be made in India, following criticism over designs resembling traditional Kolhapuri chappals that prompted the fashion house to partner with artisan groups in Maharashtra and Karnataka. Under a three‑year programme with state-backed bodies LIDCOM and LIDKAR, 2,000 pairs will be handcrafted using local techniques blended with Prada’s manufacturing methods, alongside training initiatives aimed at preserving the heritage craft. Prada says the project will cost several million euros and fairly remunerate artisans, though it has no immediate plans to open new fashion stores or factories in India despite the market’s fast growth.

 

Reuters