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The UK's Financial Conduct Authority (FCA) has launched its first AI live testing scheme, allowing major financial firms to trial AI in a controlled environment. Participants include NatWest, Monzo, and Santander. The initiative aims to ensure safe and responsible AI deployment in UK financial markets. Jessica Rusu, FCA's chief data officer, said the testing environment will help avoid pitfalls seen in other jurisdictions. The FCA is shifting towards a more collaborative regulatory approach, with applications for the second cohort opening in January. The goal is to innovate while maintaining consumer protection.

 

City AM

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The Bank of England will conduct its first stress test of the private credit sector, involving major players like Goldman Sachs, Oaktree, Carlyle, and ICG. The exercise aims to assess how these firms would respond to market shocks. The BoE's governor, Andrew Bailey, has raised concerns about the systemic risks posed by private lending, likening it to the sub-prime mortgage crisis. The results will be compared to traditional banking sector tests, with a full list of participants expected soon.

 

City AM

Spain’s government plans to require telecommunications companies, including Telefónica and Cellnex, to establish power backup systems. The measure aims to maintain phone and internet services during major disasters, enhancing the resilience of critical communication infrastructure.

 

Bloomberg

Banks and analysts say JPMorgan’s announcement that it is bringing its $1.5tn security and resilience investment initiative to the UK could embolden rivals to do likewise and speak more candidly about financing the defence sector. The initiative will see the US investment bank make direct equity and venture capital investments. “Broadly speaking, initiatives like this are a welcome development, bringing more focus to the private-equity/pre-IPO phase of financing,” observed Ronan McCullough, head of equity syndicate at  Italian lender UniCredit.

 

The Banker

Russia's state communications regulator, Roskomnadzor, has threatened to completely block WhatsApp unless it complies with local laws aimed at combating crime and terrorism. The regulator accused WhatsApp, owned by Meta Platforms, of failing to share necessary information with law enforcement after previously limiting some calls on the platform. In response, WhatsApp has claimed that the Russian government is attempting to restrict access to secure communications, while authorities promote a state-backed app called MAX, which critics speculate could track users.

 

Reuters

The UK's Financial Conduct Authority (FCA) has advanced the deadline for lenders to address motor finance complaints to 31 May, following a Supreme Court ruling. The change is part of a compensation scheme for consumers affected by excessive car loan interest rates, forecast to cost lenders £11bn. The FCA said: "It is important that complaints are now dealt with promptly, not least as some consumers have been waiting almost two years for an answer." The regulator is currently consulting on the scheme's timeframes, with final rules expected by February or March 2026.

 

City AM

Daily Mail

Slovakia's parliament has taken initial steps to dismantle the Whistleblower Protection Office (UOO), replacing it with a new agency aimed at protecting crime victims and whistleblowers. Prime Minister Robert Fico's government argues that the UOO has been politically misused and the new office will better serve those "who rightfully need protection." However, critics, including opposition parties and anti-corruption groups, warn the move undermines anti-corruption measures and could lead to political interference. Zuzana Dlugosova, chair of the UOO, will see her mandate end prematurely due to the transition. The European Union's public prosecutor office has expressed concerns that weakening protections "seriously limits detection, reporting and investigation, particularly of corruption." A final vote on the proposal could occur this week.

 

U.S. News

O2, Vodafone, EE, and Three are facing a class action lawsuit in the UK over allegations of overcharging loyal customers. The lawsuit, led by consumer rights expert Justin Gutmann, claims that up to 10.9m contracts were affected between 1 October 2015 and 31 March 2023. It seeks at least £1.141bn in damages, with affected customers potentially receiving £104 for each contract. The Competition Appeal Tribunal has approved the case to proceed to trial.

 

Sky News

Italian prosecutors are investigating an alleged conspiracy involving billionaire investors and Monte dei Paschi di Siena (MPS) to take control of insurer Generali through a €17bn takeover of Mediobanca.

 

Financial Times

The Financial Times reports on how western pharmaceutical executives and investors are warning privately that their companies risk losing the lead in drug innovation to China's cheaper and faster biotech sector.

 

Financial Times

China has issued its first batch of streamlined rare earth export licences, aiming to facilitate shipments following months of disruption caused by earlier export controls. These new "general licences," which came after a summit between Presidents Trump and Xi, allow certain companies to export under year-long permits, potentially easing supply chain pressures in industries such as automotive. While three firms have received these licences, concerns remain about the extent of their application, particularly in sensitive sectors such as defence and aerospace.

 

Reuters

Vladimir Putin has issued a warning that Russia may target the ships of nations supporting Ukraine if attacks on its tanker fleet continue unchecked. During a press briefing, he referred to actions by the Ukrainian forces as "piracy," asserting the need for a response to what he perceives as ongoing aggression.

 

Bloomberg

Nato is considering being “more aggressive” in responding to Russia’s cyber attacks, sabotage and airspace violations, the alliance’s most senior military officer has told the Financial Times.

 

Financial Times

Median base fees for FTSE 100 non-executive directors have lagged consumer price inflation by 11.8%, according to a report by consultancy Alvarez & Marsal which warns companies will struggle to recruit NEDs.

 

Financial Times

Anthropic chief scientist Jared Kaplan has warned that humanity will face a critical decision by 2030 over whether to allow AI systems to autonomously train themselves. Kaplan is urging governments and society to engage in what he called "the biggest decision," as frontier AI firms race toward artificial general intelligence. While AI could dramatically boost productivity, healthcare, and scientific research, Kaplan stresses the existential risks if machines begin to self-improve beyond human oversight. He also predicts that AI will soon be capable of performing most white-collar work, fundamentally reshaping education and employment.

 

The Guardian