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The Bank of England’s Prudential Regulation Authority (PRA) has proposed easing rules on how banks calculate trading book capital. Following similar moves by the US and EU, these changes adjust the global Basel III standards introduced after the 2008 financial crisis. The new proposals would allow banks to use internal models more easily instead of standardised approaches, reducing overall capital requirements. Additionally, the BoE announced that its upcoming private sector stress simulation intends to evaluate exactly how alternative investment firms, commercial banks, retail investors and insurance providers would handle a severe, unexpected global financial and economic crisis.

 

Financial Times

Reuters

The Daily Telegraph

City AM

Crypto exchange Binance is poised to ‌lose permission to serve European Union clients from next month because its licence application is about to be rejected, Reuters reports. Under new EU rules, called MiCA, crypto companies have until the end of this month to obtain a licence to enable ​them to continue servicing clients throughout the 27-nation bloc. Binance's application, which was made to Greece's market regulator, is to ​be turned down, two people familiar with the matter have told Reuters.

 

Reuters

Rathbones’ merger with rival wealth manager Investec Wealth & Investment drained necessary resources to implement new UK rules to protect customers. Last week, Rathbones halted investments from new high-risk clients.

 

Financial Times

Policy language is being debated by insurers as they consider updating provisions to reflect that clashes - not necessarily acts of war - between the world’s biggest powers are becoming more routine.

 

Financial Times

According to a report by First Street, 79% of global data centres are at risk from severe climate-induced weather events. The study highlights that over half of these centres are located in areas facing chronic climate stress, such as extreme heat and drought, which can significantly impact energy efficiency and operational costs. “Most underwriting for real assets still uses historical data, but the climate is no longer behaving the way the historical record would predict,” First Street CEO Matthew Eby said. “As heat, drought, and water stress increase, outdated models simply don't offer a complete view of risk anymore.” The report indicates that the Asia-Pacific region has the highest exposure, with 89% of its data centre capacity at risk.

 

CNBC

Research from Gravitee, an agent management platform, reveals that UK businesses have deployed more than 700,000 AI agents, and 205,000 of them operate without human oversight. The survey of 250 chief technology officers and vice-presidents found that three-quarters of firms have experienced data breaches linked to these agents. Rory Blundell, chief executive of Gravitee, said: "There are now hundreds of thousands of AI agents loose at major firms: a number that's increasing every second. What worries me is that a huge number of these are acting right now without any oversight and with no accountability. There is nothing standing between them and causing untold chaos - leaking data, spending money, deleting files."

 

The Times

AI is bifurcating the global labour market, according to a PwC study of data including over one billion job postings across 27 countries and territories. The technology is rewarding companies that use AI to enhance human skills, but those who use it merely to cut costs are being left behind, the study suggests. “The companies seeing the greatest returns on AI are using it to amplify human expertise, accelerate innovation and create entirely new sources of value,” observed Joe Atkinson, PwC’s global chief AI officer. “They’re pulling further ahead on productivity and growth than companies that focus primarily on automation.” Entry-level AI-exposed roles that require what have traditionally been senior human competencies, such as judgment, empathy, ethics, creativity and leadership, have grown 35% since 2019, while so-called “non-seniorised” entry-level positions, which don’t require such skills, have shrunk by 10%, PwC said.  

 

Bloomberg

The European Central Bank’s wage tracker forecasts that salaries will grow by an annual 2.6% in in the third and fourth quarter - stronger than the projection for the first six months, but below the 5.2% peak of two years ago. “This increase over the course of the year reflects the fading mechanical downward effect of large one-off payments that were made in 2024 but not in 2025,” the ECB said. Bloomberg notes that policymakers are currently particularly attentive to salaries because they want to prevent an energy-induced inflation surge from becoming entrenched in wages and companies’ selling prices.

 

Bloomberg

The UK has lost £74bn in goods exports since Brexit, according to the Resolution Foundation. The decline, which represents a 20% drop in goods exports from 2019 to 2024, is the sharpest among G7 nations. Key sectors like cars and pharmaceuticals have suffered the most. Sophie Hale, research director at the Resolution Foundation, said: "The UK has lost ground in exactly the goods the world is buying more of." A British Chambers of Commerce survey shows that 54% of UK exporters believe the post-Brexit trade agreement has hindered their sales to the EU, while just 16% said the trade agreement has helped them to increase their exports.

 

The Times

German financial watchdog BaFin has stripped three senior partners of Hamburg-based Berenberg of their authority to run the country’s oldest private bank amid suspicions of corporate governance breaches.

 

Financial Times

The UK has levied its largest penalty since sanctions were introduced following Russia’s invasion of Ukraine in 2022. A UK subsidiary of Sabre, which provides ticketing services for airlines, was fined more than £1m ($1.3m) for providing Russian carrier Ural Airlines with access to its Global Distribution System for seven months after the company was sanctioned in 2022, according to the Office of Financial Sanctions Implementation (OFSI). The action “underlines the UK’s increasingly robust enforcement of the Russia sanctions regime in support of Ukraine and sends clear compliance lessons to industry,” OFSI said.

 

Bloomberg

Hungarian Prime Minister Peter Magyar is to request that the European Parliament (EP) withdraws its 2024 lawsuit against the European Commission regarding the release of EU funds to Hungary. The EP initiated the lawsuit after the Commission unblocked €10.2bn ($11.71bn) in December 2023, while it ⁠was seeking to persuade Budapest to lift its veto on €50bn ($57.38bn) in aid for Ukraine. "This lawsuit could have a major impact ​on Hungary's EU funds," ⁠Magyar said in a Facebook post. "I will ask the president (of the EP) to withdraw the lawsuit, or at least request the suspension of proceedings so that ⁠EU funds due to the Hungarian people are not jeopardised because of the ⁠decisions of the previous government." His administration aims to unlock an additional €16.4bn ($18.82bn) in EU recovery funds, crucial for revitalising Hungary's stagnant economy.

 

U.S. News

A court in Australia has banned former Star Entertainment CEO Matthias Bekier ​from managing companies for six years and fined him A$700,000 ($494,620) over failure to handle ‌money laundering risks at the casino operator. The judgment comes months after the Federal Court found Bekier and former chief legal and risk officer Paula Martin breached their duties ​by failing to sufficiently address risks at the company. Much of the judgment was devoted to the pair's self-serving statements which referred to the distress of the case but not the failings that brought it about. "Although both contraveners relied upon evidence of reputational harm, professional consequences and, in Ms Martin's case, physical and psychological conditions, there was very little evidence demonstrating developed insight into the seriousness of the contraventions themselves," Justice Lee said.

 

ABC News

Reuters

The United ‌Nations Children's Fund (UNICEF) has said that almost all of the world's children are exposed to at least one climate hazard. UNICEF's Children's Climate Risk Report says as many as 1.1bn children globally were exposed to at least three overlapping climate risks that could overwhelm governments ​and social services. "It's not just the exposure to the single hazards like floods or droughts ‌or ⁠heat waves and extreme heat that children face, but it is the exposure to multiple hazards," explained Rohini Sampoornam Swaminathan, UNICEF statistics manager.

 

Reuters

UNICEF

The Guardian