Welcome to the December 2025 edition of our regulatory newsletter, as authorities worldwide continued to recalibrate oversight frameworks amid rapid technological change and evolving financial risks. This month saw governments move decisively to coordinate artificial intelligence policy at the national level, most notably through a U.S. Executive Order establishing a unified federal AI framework and addressing fragmentation across state rules. At the same time, regulators adv

As climate change accelerates, physical risks like flooding are becoming more frequent, severe, and financially material. For banks, these are not just operational disruptions — they can trigger liquidity stress, asset impairments, and even off-balance sheet losses. Flooding is no longer a remote environmental concern. It is now a financial risk event that can reverberate through a bank’s entire balance sheet, challenging risk teams, ALM desks, and executive committees alike.

W elcome to the latest edition of our global AI update.  This month’s news spans late November through mid-December 2025, and it’s been a whirlwind. The frontier of AI continues advancing: Google launched Gemini 3  (Nov 2025), its most powerful multimodal model with deep reasoning, while Anthropic and OpenAI rolled out major updates (Claude Opus 4.5 and GPT-5.1/5.2). At the same time, governments are moving fast on policy. The European Commission proposed an omnibus digital p

Why the same private credit loan is different on a bank’s or insurer’s balance sheet Introduction Since I started exploring partnerships between banks and insurers, I have been intrigued by the question: “how can a loan, with a certain economic risk profile, have a very different capital charge on a bank’s or an insurer’s balance sheet, and is this capital arbitrage, or not?” Over the years, I have had many discussions with colleagues on this topic and more recently, I have r

Meta just made a move that says a lot about where the company thinks the future of information is heading. After years of stepping away from news, it has now signed commercial agreements with some of the world’s biggest publishers. The goal is simple. Meta AI should finally be able to answer real-time questions with confidence, instead of sounding like it’s stuck in yesterday. Ask Meta AI about a breaking headline and you’ll now get tighter summaries and links from outlets li

Climate change has evolved from being a peripheral concern to a core financial risk for the banking sector. Increasingly, banks are being called upon to recognize, quantify, and manage the impact of climate-related events — not just for reputational alignment, but to safeguard their credit portfolios, operational resilience, and long-term financial stability. At the heart of this shift are two key forms of climate risk: Physical risk , which stems from the direct impact of cl

The strong reaction to recent discussions around IFS 9 overlays and CRR Ill Margins of Conservatism (MoC) highlights how easy it is to conflate these two adjustment mechanisms. Both arise when models face uncertainty, data gaps, or limitations. Both have the effect of moving estimates away from "pure" model output. And both are seen by stakeholders as adding prudence. Yet beneath this surface similarity lie important differences in purpose, direction, and governance. Misunder

From Pilots To Strategic AI Transformation AI Technology Is Ready -  But Organisational Capability Is Not Every day, leaders are bombarded with noise - headlines about trillion-dollar AI opportunities, predictions of disruption, and endless technical detail. Everyone agrees AI has vast potential. But the truth is, most organisations still don’t know how to get from experimentation to ROI. Across industries, CEOs, CFOs, COOs, CIOs, CROs, and transformation heads all describe t

Executive summary The regulatory breakthrough that changes everything After years of institutional exile, cryptocurrency and stablecoins are poised for mainstream adoption by traditional banks. This is driven by a fundamental shift in the U.S. and global regulatory frameworks. The problem: prohibitive cost of capital Basel Committee capital rules imposed a punitive 1,250% risk weighting on crypto assets, making them economically impossible for banks. A simple example: a $1 mi

Welcome to the November 2025 edition of our regulatory newsletter, featuring landmark reforms in financial supervision and prudential policy worldwide. This month, regulators worldwide continued to sharpen rules on digital innovation, AI risk, and financial stability.  This month’s highlights:  The Bank of England (BoE) kicked off a consultation on sterling stablecoin oversight, while Singapore’s MAS set out draft AI governance standards. The U.S. Federal Reserve unveiled new

The regulatory environment for UK building societies is undergoing a significant shift. The Prudential Regulation Authority (PRA) is progressing toward the phased implementation of its Strong and Simple Regime (SSR) from 2026. The SSR is designed to simplify prudential requirements for small domestic deposit takers (SDDTs), thereby providing simplified liquidity and disclosure requirements for eligible building societies. Also, the PRA is set to withdraw Supervisory Statement

C ontents Introduction About CVA and SA-CVA Benefits of SA-CVA Challenges with IMA-CVA Approach for Banks Summary References Introduction CVA reflects the market value of counterparty credit risks, the expected loss if a counterparty defaults. The rise in CVA-related capital for global banks stems from new regulations and increasing derivatives complexity. CVA assesses counterparty risk for OTC derivatives. Basel’s new rules replace prior methods with SA-CVA and BA-CVA, remov

Abstract:   Digital Asset Platform (DAP) represents a landmark transformation in capital markets. The strategic rationale behind DAP is to automate and digitize the entire asset lifecycle, from issuance through trading, settlement, and custody, by employing a permissioned blockchain, Daml Smart Contracts, and cloud-native architecture. This transformation results in faster settlement, eliminates manual reconciliation, enhances transparency, and enables real-time compliance, a

W elcome to the latest edition of our global AI update. This one captures the most significant shifts from late October and November, and a lot has been happening. India introduced its first comprehensive set of AI Governance Guidelines, designed to encourage innovation while promoting responsible adoption. Around the same time, companies like Cognizant began rolling out Claude to hundreds of thousands of employees, demonstrating how quickly enterprise AI is transitioning fro

10 years of contributor insight reveal default rate shifts for Private U.S. corporates and Financials. Explore the CRI at creditbenchmark.com D ashboard Executive Summary Banks, financial institutions, and investors struggle with limited credit risk visibility for private, unrated, loan-financed borrowers. Unlike public bond issuers, these firms operate outside rating agency coverage and lack market price transparency. They need trustworthy, timely, and distinctive inputs ba

Introduction Securitizations help European banks lend more. They allow banks to move the credit risks of loans off their balance sheets and use the freed-up capital to support new lending. But since the Global Financial Crisis (“GFC”), securitization volumes in Europe have dropped significantly, while in contrast, the U.S. market has grown, even though U.S. defaults peaked during the GFC. To address this, the EU Commission is reviewing how securitization works in the EU. This

How do you know if an AI model is truly smart, or just good at passing tests? A sweeping new study from the University of Oxford  has revealed that many of the world’s most popular AI benchmarks may not accurately measure what they claim. The research, titled “Measuring What Matters: Construct Validity in Large Language Model Benchmarks,”  analyzed 445  benchmarking papers from top AI and machine learning conferences, and the findings are raising eyebrows across the industry.

AI might be the Future- but that Future is coming with a Bigger Electricity Bill! Every time an AI model trains, a chatbot answers, or a tool generates an image, somewhere a data center is pulling megawatts of electricity to make it happen. Now, with global energy prices soaring, that hidden cost is coming into focus. The tech world’s biggest challenge isn’t just building more intelligent AI anymore; it’s finding the power to keep it running. The Growing Strain on AI Infrastr

Jet lag returning from Malaysia this week means that my usual “it’s 6:30am on a Saturday morning” is more like “I fell asleep at 3pm”… but the outcome is the same. In toying with using AI for scenario planning over the last few weeks it struck me that the two-day scenario workshop we ran earlier in the year could now be emulated in a couple of hours. The TL;DR -  Traditional scenario planning takes months of planning and costs upwards of $100,000 for a board level simulation.

Welcome to the October 2025 edition of our regulatory newsletter, featuring landmark reforms in financial supervision and prudential policy worldwide. This month’s highlights: the Federal Reserve’s push for transparency in bank stress tests, India’s adoption of the global IFRS 9 credit loss model, new monetary signals from the Fed, major EU and UK rule consultations, pivotal Basel Committee and Singapore MAS amendments, and advances in fintech governance. Regulatory authoriti