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Some of the UK's leading lenders have expressed their frustrations with UK banking regulation in a new report from the Association for Financial Markets in Europe (AFME). The report criticises current capital requirements, saying that they misalign with actual risk and hinder economic growth. The AFME, which represents over 150 global banks, said the UK's leverage ratio is a "clear instance of gold-plating" that "penalises good risk management and creates incentives to invest in higher risk assets." The association has urged the Bank of England to reconsider the leverage ratio, saying a review by the Bank's Financial Policy Committee is "an important opportunity to improve the capital framework and enable the banking sector to further support the UK economy by removing excessive conservatism, while maintaining resilience." 

 

City AM

Revolut has been fined €11.5m by the Italian competition regulator for misleading customers regarding fees and terms of its investment products. The regulator found that advertisements suggesting customers could trade with 0% commission were inaccurate. Revolut Securities Europe UAB and Revolut Group Holdings will each pay €5m for failing to provide clear information about additional costs.

 

City AM

The Times

The UK's Financial Reporting Council (FRC) has concluded its investigation into KPMG regarding its audit of Entain's financial statements for the year ending December 31, 2022. The probe was launched after Ladbrokes owner Entain agreed to pay a £585m financial penalty to HMRC related to bribery allegations at a former Turkish subsidiary. Announcing that it has closed the probe into KPMG, the regulator said: "Having reviewed the evidence obtained in the investigation, and having considered all relevant factors, the FRC's executive counsel has decided not to bring enforcement action."

 

City AM

Senior City figures warn that updated EU banking rules may harm London's financial sector, hinder European defence spending, and complicate UK-EU relations. Chancellor Rachel Reeves is "monitoring" the situation.

 

Financial Times

European Commission officials are cautioning against excessive energy subsidies, tax cuts and price caps amid rising prices from the Iran conflict, urging targeted, temporary measures to prevent a fiscal crisis.

 

Financial Times

The ongoing conflict with Iran has severely impacted the Israeli tech sector, with over 25% of employees absent due to reserve duty, school closures, and security concerns. A survey by the Israel Innovation Authority found that 50% of tech firms are struggling to meet development goals and product launch deadlines. “At present, the sector is facing a range of challenges related to human capital, supply chains, product development, and access to capital,” said Israel Innovation Authority CEO Dror Bin. “Experience from recent years shows that the sector has proven its ability to recover quickly.” Karin Mayer Rubinstein, CEO of Israel Advanced Technology Industries (IATI), an umbrella organisation of high-tech firms operating in Israel, observed: “The main challenge now is the workforce shortage, where damage is caused for production and in the supply chain of companies that are manufacturing as well and have plants.”

 

The Times of Israel

NHS staff are refusing to work on Palantir’s health data platform over ethical concerns about the controversial US technology company, which was awarded a £330m contract in 2023.

 

Financial Times

The UK's Fair Work Agency (FWA), which launches today, brings together several existing labour enforcement bodies and its responsibilities will include policing the minimum wage, holiday pay and modern slavery. The agency's incoming chair, Matthew Taylor, recently listed the five priorities the Department of Business and Trade had laid out for the FWA in its first year - including “thought leadership” and “reducing regulatory burdens.” The Guardian reports that trade unions say that, rather than reducing regulation, a more robust approach and greater funding for inspections is needed. Sharon Graham, the general secretary of Unite, said the priorities showed the agency was “in danger of being a dead duck before it even begins . . . For too long, workers have borne the brunt of disreputable employers who have had carte blanche . . . The government needs to urgently ensure that the FWA focuses its attention on bringing rogue bosses to heel rather than seeking ways to allow dodgy companies to continue bad behaviour.” The FWA is a cornerstone of Labour’s Employment Rights Act - sweeping reforms of workers’ rights that are set to take effect over the next two years. 

 

Financial Times

The Guardian

The Times

Germany's government is under pressure to bolster laws against digital violence after actor Collien Fernandes accused her ex-husband, Christian Ulmen, of creating AI-generated pornographic deepfakes of her. Justice Minister Stefanie Hubig has announced plans for a bill to criminalise the production of such content, with penalties of up to two years in prison. Hubig emphasised the need for accountability from online platforms, saying: "Digital violence must not be a business model." Fernandes is pursuing legal action in Spain, citing stronger protections for women's rights in that country when compared to Germany.

 

U.S. News

The global plastics industry is under significant pressure as the Iran conflict disrupts the supply of critical petrochemical inputs such as monoethylene glycol (MEG) and purified terephthalic acid (PTA), both essential for producing polyethylene terephthalate (PET), a widely used plastic in food packaging, textiles and consumer goods. Multiple producers across Asia, the Middle East and Europe have declared force majeure, halting or limiting shipments due to damaged infrastructure, refinery outages and the effective closure of the Strait of Hormuz, a key global shipping route. In Asia and Europe, consumers are beginning to see price increases in everyday items such as packaging, cleaning products and food goods, as manufacturers pass through higher costs. The impact is expected to spread to North America in the coming weeks despite its relatively more insulated petrochemical market, with estimates suggesting packaging costs could rise by around 5% in the short term and potentially up to 20% if supply constraints persist. 

 

Bloomberg

Finance ministers from Spain, Austria, Germany, Italy, and Portugal have urged the European Union to impose a tax on windfall profits of energy companies due to rising fuel prices linked to the Middle East conflict. In a letter made public by Spanish Economy Minister Carlos Cuerpo, the officals told EU Climate Commissioner Wopke Hoekstra that such a measure would "ease the burden on consumers and taxpayers." The letter argued that the tax would ensure those profiting from the war contribute to alleviating any financial strain on the general public.

 

The Independent

Unilever is prioritising smaller, high-growth acquisitions in India as part of a strategy to expand in fast-growing markets and strengthen its presence in premium and digital channels, while ruling out large-scale transformational deals. The company is focusing on “super growth assets” such as digitally native and direct-to-consumer brands, with India and the US together accounting for 38% of group turnover, as it reshapes its portfolio towards higher-growth beauty, wellbeing and personal care segments.

 

Economic Times