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

The Bank for International Settlements (BIS) has issued a warning regarding the risks associated with stablecoins and urged countries to accelerate the tokenisation of their currencies. The BIS highlighted concerns such as the potential for stablecoins to undermine monetary sovereignty and the risk of capital flight from emerging markets. "Stablecoins as a form of sound money fall short, and without regulation pose a risk to financial stability and monetary sovereignty," the BIS said in an early chapter of its annual report. The BIS advocates for a tokenised "unified ledger" system that integrates central bank reserves and commercial bank deposits, aiming to enhance payment efficiency and transparency.

 

Financial Times

Reuters

The Times

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European Union talks on a proposed law mandating companies to support their climate-friendly claims with evidence have been suspended after the European Commission said the policy would overburden small firms and threatened to shelve it. "We are hitting the pause button," a spokesperson for Poland, which holds the EU's rotating presidency, said. "There are too many doubts and we need clarity from the European Commission on its intentions - based on that we can decide on the next steps." A European Commission spokesperson said on Friday with reference to its attempts to simplify EU regulation for European businesses: "The current discussions around the proposal go against the Commission's simplification agenda."  

 

Reuters

Investigators from the French national financial prosecutor's office (PNF) have conducted searches at the offices of Société Générale in Paris and Luxembourg as part of a tax fraud investigation. The homes of five bank executives were also searched, and the executives were taken into custody. The investigation, which began in January 2024, focuses on allegations of "tax fraud laundering" and "criminal conspiracy." Authorities are examining how a department within the bank facilitated tax-related setups for major French companies, with actions reportedly occurring since 2009. The PNF noted that the inquiry is distinct from the ongoing "cum-ex" dividend stripping investigation involving Société Générale.

 

Reuters

The UK government has acknowledged an increase in China's attempts to spy and disrupt the nation's economy and democracy, while still recognising Beijing as a crucial economic partner. Foreign Secretary David Lammy said: "China's power is an inescapable fact," saying that severing ties with the world's second-largest economy is "not an option." The government's "China audit" revealed that China is the UK's third-largest trading partner and a significant source of international students. The review highlighted the need for a trade relationship that fosters secure growth, while acknowledging ongoing tensions over human rights and cybersecurity.

 

The Independent UK

Amid rising concerns over US politics and data privacy, more Europeans are turning to digital alternatives to US tech giants. Since President Donald Trump’s second term began, Berlin-based nonprofits like Topio have seen increased demand to remove Google-linked apps. European services like Ecosia and ProtonMail have gained traction, though Google and Meta still dominate. The trend reflects growing calls for "digital sovereignty" as EU citizens and governments seek to reduce dependence on US firms. “The market is too captured,” said technologist Robin Berjon, who observed that conscious switching won’t suffice without regulation.

 

Reuters

The Spanish government has imposed a significant barrier to BBVA's €11bn hostile takeover bid for Sabadell, saying that the two banks must maintain separate legal identities and management for at least three years. Carlos Cuerpo, Spain's economy minister, stressed that the decision aims to protect small businesses and regional economies, asserting that the banks must "maximise their value independently." BBVA's chair, Carlos Torres, has labelled the government's conditions as "illegal," raising the possibility of a legal challenge. The move could also lead to tensions with the European Commission, which insists that any government-imposed conditions must be justified. Sabadell has indicated that if BBVA proceeds with its bid, it must disclose how the government's restrictions will affect its operations and shareholder returns.

 

Financial Times

The Daily Telegraph

Swiss competition authority COMCO has opened a probe into German consumer products group Beiersdorf about whether it has relative market power over Swiss retailer Migros in a dispute about the cost of its Nivea products. The regulator has alleged that Beiersdorf is refusing to allow Migros to purchase Nivea brand products under the same conditions as abroad. 

 

Reuters

Under the UK government's industrial strategy, rules intended to govern foreign takeovers of security-sensitive British companies are to be rewritten as part of an attempt to boost conditions for investment.

 

Financial Times

The British Retail Consortium (BRC) has come under fire for publishing "made up" sales figures for Marks & Spencer following the cyber attack that disrupted the retailer's operations. The BRC used outdated figures as placeholders instead of excluding M&S from its BRC-KPMG benchmark, which is vital for assessing retail performance. The decision has raised concerns about the integrity of the benchmark, with Richard Lim, chief executive of Retail Economics, warning that it could mislead retailers in their strategic decisions. M&S has reported a significant sales decline due to the attack, projecting a £300m hit to profits. The BRC defended its actions, saying that excluding M&S would have revealed sensitive market information.

 

The Daily Telegraph

The Office for National Statistics (ONS) has appointed James Benford, a former chief data officer at the Bank of England, as its new director general. The appointment comes amid growing concerns regarding the ONS's credibility in handling key economic data. Benford, who will assume his role in early August, aims to "rebuild trust" in the official statistics that guide critical decisions. He has pointed to the need for “better alignment” within the ONS and across the broader data ecosystem. Emma Rourke, an ONS official, noted that Benford would focus on "AI-driven innovation" and enhancing core statistics. The ONS has faced scrutiny from MPs and economists, particularly regarding its jobs data and inflation calculations, with recent errors further undermining its reliability.

 

City AM

Daily Mail

Testudo, a start-up backed by Lloyd's of London, has introduced a new data and technology platform designed for underwriting insurance policies related to AI risks. The platform analyses real-time data on AI litigation and regulatory changes, helping businesses manage legal and financial exposures linked to AI. With generative AI lawsuits rising by 23% in early 2025 compared to the previous year, Testudo aims to launch new insurance products for enterprise clients by late 2025. The global market for AI-related insurance premiums is projected to reach $4.7bn annually by 2032. Testudo's platform simplifies the underwriting process, making it easier for clients to adopt and scale.

 

Reinsurance news

Aston Martin Lagonda is set to resume vehicle shipments to the United States after a three-month hiatus due to President Trump's tariffs. Adrian Hallmark, the company's head, announced at the Society of Motor Manufacturers and Traders conference that shipments would restart following a trade deal that sets tariffs at 10%, significantly higher than the previous 2.5%. Hallmark noted that the pause was akin to "losing a third of your salary for three months."

 

The Times

The price of cobalt jumped on Monday after the Democratic Republic of Congo, the world’s biggest producer of the battery metal, extended a ban on exports.

 

Financial Times

The UK government has established the London Coalition on Sustainable Sovereign Debt to assist developing nations in managing their sovereign debt and attracting private investment. Following a wave of defaults exacerbated by the pandemic and rising global interest rates, many countries still face significant debt repayment challenges. The coalition, co-chaired by Emma Reynolds, economic secretary to the Treasury, and Jose Vinals, former chairman of Standard Chartered, aims to enhance the clarity of debt contracts, improve loan terms related to natural disasters, and promote fair debt restructuring. The initiative coincides with the upcoming United Nations Financing for Development conference in Seville, and highlights the urgent need for reform in the face of reduced aid from wealthier nations.

 

Daily Mail

The Irish Government is set to introduce the Israeli Settlements (Prohibition of Importation of Goods) Bill 2025, which will prohibit imports from Israeli settlements in the Occupied Palestinian territories. Deputy Irish premier Simon Harris said: "This is an important measure, because we are speaking up and speaking out on behalf of the people of Ireland in relation to this genocidal activity." The legislation marks Ireland as the first European country to take such a step. The move follows a review of the Association Agreement, highlighting Israel's breach of human rights obligations, and a call from Ireland and nine other European nations for the European Commission to reassess its trade obligations under the International Court of Justice advisory opinion. Senator Frances Black, who initiated the original bill, expressed her support for the draft legislation and the potential inclusion of services in the final version.

 

London Evening Standard

An employment tribunal in east London has ruled that pointing out that an employee’s work is messy and mistake-ridden is not harassment. The ruling came in the case of Thomas Shevlin, a senior HR operations manager at publishing firm John Wiley & Sons, who claimed he was left “devastated, hurt and profoundly upset” after he was told by his boss that his work was messy and required improvement.  Shevlin said that any errors were a result of his ADHD and accused Rebecca Roycroft of discrimination and harassment. The tribunal disagreed. Employment judge David Massarella said: “The making of spelling and grammar errors in professional documents is, self-evidently, a weakness . . . We consider that [Shevlin's] response, and that sense of grievance, to be unjustified having regard these anodyne comments. In our judgment, there was no unfavourable treatment. If a manager cannot be explicit about a weakness in performance, there is a risk that an entirely well meant warning will not be taken onboard by the employee.”

 

The Guardian