Global Regulator & Central Bank News Roundup
Edition 422026Week of October 19
Global developments
Ahead of COP17, the Network for Greening the Financial System has issued a dedicated declaration urging practical assessment of nature-related financial risks despite data and methodological gaps. It is releasing an implementation compendium drawing on practices across 15 jurisdictions and six country case studies. A new Nature-Economy Model Intercomparison Project will test methods that could inform future NGFS nature scenarios and explore complementarities with climate scenarios.
The Network for Greening the Financial System (NGFS) has issued a declaration for the United Nations biodiversity conference COP17 in Armenia, urging central banks and supervisors to assess nature-related financial risks despite remaining data and methodological gaps. Biodiversity loss and ecosystem degradation can transmit through supply disruptions, resource scarcity and inflationary pressures to threaten financial stability. The declaration builds on the NGFS’s 2024 Conceptual Framework and its 2026 Nature Package on data, modelling and supervision, emphasizing that existing tools already support practical action within members’ mandates, including dependency mapping, water risk indicators and analysis of exposures across the financial system. Alongside the declaration, the NGFS is releasing a compendium of implementation practices drawing on a survey across 15 member jurisdictions and six detailed country case studies. It is also establishing the Nature-Economy Model Intercomparison Project, inviting leading modelling teams to simulate the economic and financial consequences of a common narrative. The project will test methods that could inform future NGFS nature scenarios and explore complementarities with its climate scenario framework, addressing continuing difficulties in modelling the effects of ecosystem degradation.
A new Bank for International Settlements working paper estimates that the Iran war's energy shock could add 1.5–2.0 percentage points to cumulative inflation over 2026–27, primarily through delayed price adjustments and higher short-term inflation expectations. While the evidence of fiscal amplification remains inconclusive and long-term inflation expectations appear anchored, the findings suggest that central banks should not entirely look through the shock, although aggressive tightening comparable to 2022 appears unwarranted.
The Bank for International Settlements has published a working paper examining how energy supply disruptions from the Iran conflict could affect inflation in the euro area, United Kingdom and United States. Based on data through May 2026, the paper estimates a cumulative inflation impact of 1.5–2.0 percentage points over 2026–27, smaller and less persistent than the 2021–24 inflation surge. The estimates are indicative rather than forecasts, with monetary policy responses ultimately shaping inflation outcomes. Most of the estimated impact, 1.2–1.6 percentage points, comes from higher energy costs passing through to other prices as firms adjust them over time. UK price data suggest that accumulated price pressures could accelerate inflation while making interest rate increases less effective than usual. Higher household and firm inflation expectations could add another 0.3–0.4 percentage points through price and wage adjustments. In an accompanying discussion, University of Basel economist Sarah Lein emphasizes that firms respond more strongly to short-term than long-term inflation expectations, creating scope for further inflationary pressure if the increase in short-term expectations persists. The evidence of further inflationary pressure from fiscal policy remains inconclusive, while inflation swap and options data suggest that long-term inflation expectations remain anchored. In a separate discussion, Johns Hopkins University economist Francesco Bianchi highlights longer-term fiscal inflation risks if geopolitical fragmentation reverses the disinflationary effects of globalization. Overall, the paper suggests that the persistence of the energy shock provides grounds for not fully looking through its inflationary impact, although aggressive monetary tightening comparable to 2022 appears unwarranted.
The Basel Committee on Banking Supervision has reviewed AML/CFT supervisory risk assessment practices across 19 jurisdictions and insights from an industry workshop on AI in transaction monitoring. The findings highlight challenges in supervisory data quality, manual processing and risk assessment methodologies, alongside AI's potential to strengthen financial crime detection. Effective AI adoption requires reliable data, explainable models and human oversight, while algorithmic bias, resource demands and regulatory uncertainty remain key obstacles.
The Basel Committee on Banking Supervision has published findings from a stocktake of anti-money laundering and countering the financing of terrorism (AML/CFT) supervisory practices across 19 jurisdictions, alongside insights from an industry workshop on the use of artificial intelligence (AI) in transaction monitoring. The review highlights differing approaches to assessing money laundering and terrorist financing (ML/TF) risks and challenges related to supervisory data collection and analysis. It also underscores the importance of data quality, governance and human oversight in the use of AI for transaction monitoring. Supervisors rely on questionnaires, financial intelligence units and audit reports to assess institutions' inherent ML/TF risks and the effectiveness of their AML/CFT controls. Most authorities collect more than 100 data points annually through questionnaires and use formula-based or matrix-based approaches to determine residual risks and prioritise supervisory attention. However, manual data processing remains widespread, prompting interest in supervisory technology to improve automation and analysis. Other challenges include ensuring data completeness, appropriately balancing inherent risks against control effectiveness, managing cross-border complexities and regularly updating assessment methodologies to reflect evolving risks. The November 2024 industry workshop highlighted the potential of AI and machine learning to improve transaction monitoring through anomaly detection, customer segmentation and dynamic threshold management. Effective implementation depends on high-quality data, robust governance and human oversight, particularly for model validation, alert reviews and decisions on suspicious transaction reports. Participants also identified algorithmic bias, substantial infrastructure and skills requirements, and the need for explainable AI outputs as key challenges. Some highlighted regulatory uncertainty as an additional barrier to adoption, pointing to the value of clearer international guidance and greater public-private cooperation.
The World Federation of Exchanges has published research finding that traditional equity markets remain the principal source of price discovery for third-party tokenised equities, with tokens generally following the prices of their underlying securities despite trading around the clock. Based on 61 matched pairs, the study found that approximately 80% maintained a stable long-term price relationship, while underlying equities accounted for more than 80% of the permanent price component for the median pair. The findings suggest tokenisation currently functions primarily as an alternative distribution channel for exchange-derived prices, raising concerns about differences in regulatory oversight and investor protection.
The World Federation of Exchanges (WFE) has published research finding that traditional equity markets remain the dominant source of price discovery for third-party tokenised equities, despite their availability for trading around the clock on cryptocurrency platforms. The study finds that token prices largely follow their underlying securities rather than independently determine their value, suggesting that tokenisation currently serves primarily as an alternative distribution channel for exposures priced on traditional exchanges. The findings also raise regulatory concerns about token markets relying on prices formed within regulated exchanges without equivalent disclosure, surveillance and investor protection arrangements. The research examined 61 matched pairs of tokenised equities and their underlying U.S.-listed stocks or exchange-traded funds between July 2025 and May 2026. Approximately 80% of pairs exhibited a stable long-term price relationship, with prices moving almost one-for-one. When prices diverged, tokens generally made most of the adjustment towards their underlying securities. For the median pair, more than 80% of the permanent component of the common price was attributable to the underlying equity. A separate information-share analysis found that underlying equities led price discovery in 11 of the 51 pairs assessed under a conservative classification criterion, while tokens led in none, with the remaining results inconclusive. The findings indicate that price formation remains concentrated in established equity markets, even where tokenised alternatives offer extended trading hours. This dependence raises questions about investor protection and market stability, as token investors benefit from prices formed within regulated markets without necessarily receiving the same regulatory safeguards. The analysis is limited to daily observations during the tokenised equity market's first 11 months and does not capture intraday price discovery dynamics, which may evolve as token trading activity increases.
The International Association of Insurance Supervisors has launched an open-access library of initiatives and case studies to help supervisors and policymakers address natural catastrophe insurance protection gaps, initially focusing on gap assessments and public-private insurance programmes. The library currently features 53 initiatives, including 12 with case studies, and will progressively expand to cover innovative insurance solutions, risk reduction incentives and risk awareness, with insights intended to inform future supervisory and policy guidance.
The International Association of Insurance Supervisors (IAIS) has launched the Protection Gaps Library of Initiatives, an open-access resource bringing together practical approaches from different jurisdictions to address natural catastrophe insurance protection gaps. These gaps, representing the uninsured portion of economic losses from natural catastrophes, can hinder recovery, strain public finances and increase the vulnerability of households and businesses. The library currently features 53 initiatives, including 12 with case studies, and initially focuses on assessing protection gaps and public-private insurance programmes. Building on its earlier call to action and joint work with the World Bank, the resource aims to help supervisors and policymakers identify approaches suited to their respective market conditions. The IAIS plans to progressively expand the library to cover parametric insurance and other innovative solutions, incentives for risk reduction, financial literacy and risk awareness. Insights from the initiatives and case studies will inform further guidance for supervisors and policymakers
Active global consultations
The Islamic Financial Services Board is seeking feedback on a revised Standard on risk management for takāful undertakings that would supersede IFSB-14. It addresses risks arising from the distinctive structure of takāful, in which participants collectively bear underwriting risk through the Participants’ Risk Fund without being directly represented in its governance. The fund is instead managed by the takāful operator, which must act in participants’ interests while being paid out of the same funds it manages, which can create conflicts of interest. Supervisors would require each Participants’ Risk Fund to hold retained reserves in addition to technical provisions, management fees to be based on independent actuarial assessment, and surplus not to be distributed while the fund is in deficit, below minimum reserves or reliant on financial support. Operators would have to rectify, without recourse to qarḍ, deficits caused by their own decisions that inappropriately reduced the fund’s resources. Risk management, internal controls and supervisory assessment would operate at fund as well as enterprise level, with Sharīʻah non-compliance risk integrated throughout.
The Islamic Financial Services Board is seeking feedback on a revised Standard on risk management for takāful undertakings that would supersede IFSB-14. It addresses risks arising from the distinctive structure of takāful, in which participants collectively bear underwriting risk through the Participants’ Risk Fund without being directly represented in its governance. The fund is instead managed by the takāful operator, which must act in participants’ interests while being paid out of the same funds it manages, which can create conflicts of interest. Supervisors would require each Participants’ Risk Fund to hold retained reserves in addition to technical provisions, management fees to be based on independent actuarial assessment, and surplus not to be distributed while the fund is in deficit, below minimum reserves or reliant on financial support. Operators would have to rectify, without recourse to qarḍ, deficits caused by their own decisions that inappropriately reduced the fund’s resources. Risk management, internal controls and supervisory assessment would operate at fund as well as enterprise level, with Sharīʻah non-compliance risk integrated throughout.
The Committee on Payments and Market Infrastructures and the Board of the International Organization of Securities Commissions are seeking feedback on a discussion paper examining the risk management challenges arising from financial market infrastructures’ increasing reliance on third-party service providers, including for critical services. The paper reflects FMIs’ systemically important and highly interconnected role and focuses on how external and intra-group service arrangements can increase operational risk and create channels through which disruptions may be transmitted across the financial system. It does not propose additional guidance but seeks views on whether the identified challenges are comprehensive and whether further engagement or policy support would be beneficial. The paper identifies six principal challenges: increasing complexity and interconnectedness of FMI ecosystems, including cyber-related risk; concentration of third-party service providers and resulting single points of failure, vendor lock-in and systemic dependencies; complex and opaque supply chains and limited visibility of nth-party providers; difficulties designing practicable exit strategies and substituting providers, especially in stressed conditions; imbalances in bargaining power that can limit audit, information-sharing, testing and service-level rights; and variation in regulatory, supervisory and oversight expectations across jurisdictions.
The Committee on Payments and Market Infrastructures and the Board of the International Organization of Securities Commissions are seeking feedback on a discussion paper examining the risk management challenges arising from financial market infrastructures’ increasing reliance on third-party service providers, including for critical services. The paper reflects FMIs’ systemically important and highly interconnected role and focuses on how external and intra-group service arrangements can increase operational risk and create channels through which disruptions may be transmitted across the financial system. It does not propose additional guidance but seeks views on whether the identified challenges are comprehensive and whether further engagement or policy support would be beneficial. The paper identifies six principal challenges: increasing complexity and interconnectedness of FMI ecosystems, including cyber-related risk; concentration of third-party service providers and resulting single points of failure, vendor lock-in and systemic dependencies; complex and opaque supply chains and limited visibility of nth-party providers; difficulties designing practicable exit strategies and substituting providers, especially in stressed conditions; imbalances in bargaining power that can limit audit, information-sharing, testing and service-level rights; and variation in regulatory, supervisory and oversight expectations across jurisdictions.
The Committee on Payments and Market Infrastructures (CPMI) and the Board of IOSCO are consulting on a voluntary, non-binding cyber resilience toolkit intended to provide financial market infrastructures with practical, technology-neutral support for strengthening their cyber resilience frameworks and implementing operational resilience-related components of the Principles for financial market infrastructures, as informed by the 2016 CPMI-IOSCO Guidance on cyber resilience for financial market infrastructures. The toolkit is organized around four areas: (1) governance of cyber risk and resilience, including board and senior management capabilities, ecosystem risk management, maturity models and resilience metrics; (2) identification and design of extreme but plausible cyber scenarios, including scenario scope, threat intelligence, emerging risks and ecosystem dependencies; (3) response, resumption and recovery planning, covering critical operations and information assets, infrastructure and data resilience, third-party dependencies, contingency arrangements, safe resumption and the disconnection and reconnection of ecosystem entities; and (4) cyber resilience testing and exercising.
The Committee on Payments and Market Infrastructures (CPMI) and the Board of IOSCO are consulting on a voluntary, non-binding cyber resilience toolkit intended to provide financial market infrastructures with practical, technology-neutral support for strengthening their cyber resilience frameworks and implementing operational resilience-related components of the Principles for financial market infrastructures, as informed by the 2016 CPMI-IOSCO Guidance on cyber resilience for financial market infrastructures. The toolkit is organized around four areas: (1) governance of cyber risk and resilience, including board and senior management capabilities, ecosystem risk management, maturity models and resilience metrics; (2) identification and design of extreme but plausible cyber scenarios, including scenario scope, threat intelligence, emerging risks and ecosystem dependencies; (3) response, resumption and recovery planning, covering critical operations and information assets, infrastructure and data resilience, third-party dependencies, contingency arrangements, safe resumption and the disconnection and reconnection of ecosystem entities; and (4) cyber resilience testing and exercising.
The Financial Stability Board (FSB) is consulting on eight principles to guide financial authorities in FSB member jurisdictions in adapting regulation and supervision to evolving risks while reducing unnecessary complexity and duplication. Building on internationally agreed standards and reflecting domestic circumstances, the principles call for modernisation to become an ongoing part of designing, implementing and reviewing frameworks, with the aim of preserving or enhancing financial system resilience. Authorities should consider tailoring requirements to institutions’ risk profile, size, complexity and systemic importance, and address in a timely manner the risks they judge material, including emerging vulnerabilities. Supervision should be clear and streamlined, with technology complementing rather than replacing supervisory judgement, and regulation should remain responsive to innovation. Authorities in the same jurisdiction should coordinate to improve coherence and minimise duplicative information collection. Significant policy changes should be informed by stakeholder consultation and assessment of expected costs, benefits and cumulative effects, with ongoing reviews testing whether frameworks achieve their intended outcomes.
The Financial Stability Board (FSB) is consulting on eight principles to guide financial authorities in FSB member jurisdictions in adapting regulation and supervision to evolving risks while reducing unnecessary complexity and duplication. Building on internationally agreed standards and reflecting domestic circumstances, the principles call for modernisation to become an ongoing part of designing, implementing and reviewing frameworks, with the aim of preserving or enhancing financial system resilience. Authorities should consider tailoring requirements to institutions’ risk profile, size, complexity and systemic importance, and address in a timely manner the risks they judge material, including emerging vulnerabilities. Supervision should be clear and streamlined, with technology complementing rather than replacing supervisory judgement, and regulation should remain responsive to innovation. Authorities in the same jurisdiction should coordinate to improve coherence and minimise duplicative information collection. Significant policy changes should be informed by stakeholder consultation and assessment of expected costs, benefits and cumulative effects, with ongoing reviews testing whether frameworks achieve their intended outcomes.
The Basel Committee on Banking Supervision is consulting on whether to formally incorporate its 2022 agreement on cross-border exposures within the European Banking Union (EBU) into the framework for global systemically important banks (G-SIBs). Under this agreement, which already applies in practice, a parallel set of G-SIB scores is calculated for EBU-headquartered G-SIBs. These parallel scores recognise 66% of the score reduction that would result from treating intra-EBU exposures as domestic exposures. When the relevant authority proposes it, they are used to adjust these banks’ bucket allocations according to supervisory judgement. Any downward adjustment is limited to a single bucket. The parallel scores do not affect any bank’s classification as a G-SIB, or the scores or bucket allocations of banks outside the EBU. The proposals would amend chapter SCO40 of the Basel Framework, the G-SIB assessment reporting instructions and the GSIB1 disclosure template. Given that they formalise existing practice, they would apply with immediate effect once finalized.
The Basel Committee on Banking Supervision is consulting on whether to formally incorporate its 2022 agreement on cross-border exposures within the European Banking Union (EBU) into the framework for global systemically important banks (G-SIBs). Under this agreement, which already applies in practice, a parallel set of G-SIB scores is calculated for EBU-headquartered G-SIBs. These parallel scores recognise 66% of the score reduction that would result from treating intra-EBU exposures as domestic exposures. When the relevant authority proposes it, they are used to adjust these banks’ bucket allocations according to supervisory judgement. Any downward adjustment is limited to a single bucket. The parallel scores do not affect any bank’s classification as a G-SIB, or the scores or bucket allocations of banks outside the EBU. The proposals would amend chapter SCO40 of the Basel Framework, the G-SIB assessment reporting instructions and the GSIB1 disclosure template. Given that they formalise existing practice, they would apply with immediate effect once finalized.
Regional developments
The Central Bank of Malaysia has launched SSDS+ to support the issuance, depository and safekeeping of tokenised bonds and sukuk, including government and retail bonds. Integration with RENTAS+ enables settlement around the clock, with corresponding payments made in central bank money. The launch follows its 2025 discussion paper on developing tokenised financial services.
The Central Bank of Malaysia (BNM) has launched SSDS+, a platform for issuing, depositing and safekeeping tokenised bonds and sukuk. Integrated with RENTAS+, it supports payment and settlement around the clock. SSDS+ manages securities transfers and ownership records, while RENTAS+ handles the corresponding payments for bond purchases in central bank money. Developed in-house using cloud and distributed ledger technologies, SSDS+ builds on the existing Scripless Securities Depository System, the central securities depository for Malaysia’s wholesale financial market. Beyond wholesale issuances, the platform is ready to support tokenised government and retail bonds. Digital representation of securities can simplify transactions, allow more flexible instrument design and broaden investment access. The launch follows BNM’s October 2025 discussion paper exploring an approach to asset tokenisation and seeking input to inform its regulatory and development framework.
The Monetary Authority of Singapore has expanded the BLOOM initiative to include Bank Negara Malaysia and the Bank of Thailand as policymaker members, alongside eight additional industry participants and the World Bank Group. The initiative will develop common approaches for cross-border digital money acceptance and settlement, interoperability across networks, and programmable safeguards, with the aim of reducing fragmented arrangements and implementation costs while accounting for jurisdiction-specific regulatory requirements.
The Monetary Authority of Singapore (MAS) has announced that Bank Negara Malaysia and the Bank of Thailand have joined the Borderless, Liquid, Open, Online, Multi-currency (BLOOM) initiative as policymaker members. The three central banks will collaborate with industry participants to develop common approaches for accepting, exchanging and settling digital money across institutions, networks and jurisdictions, including tokenised deposits and regulated stablecoins. The initiative has also expanded to include eight additional industry participants and the World Bank Group, broadening collaboration on cross-border applications in payments, treasury and trade finance. The work will focus on three areas: (1) cross-border acceptance and settlement, including contractual arrangements between counterparties and settlement across markets; (2) technical and operational interoperability between different digital money arrangements and payment networks; and (3) programmable safeguards, including identity verification, sanctions screening and transaction controls. Participants will develop common implementation frameworks and align commercial and operating arrangements, taking account of international standards and jurisdiction-specific supervisory expectations. These efforts aim to reduce the need for separate arrangements with individual counterparties or markets, lowering implementation costs and accelerating time to market while incorporating regulatory and public policy considerations.
The Reserve Bank of New Zealand has established a voluntary framework, effective January 1, 2027, to improve access to basic transaction services for individuals facing financial exclusion. Participating providers will develop implementation plans, supported by illustrative guidance on flexible identity verification, inclusive onboarding and proportionate risk controls within existing regulatory requirements. The framework also provides for progress monitoring through data reporting, annual engagement with the central bank and aggregated annual reports.
The Reserve Bank of New Zealand (RBNZ) has established a voluntary framework with eight financial service providers and five other participating agencies to improve access to basic transaction services for individuals facing financial exclusion. The framework, set out in a memorandum of understanding (MoU) effective January 1, 2027, provides for implementation plans, inclusive onboarding practices and monitoring of progress in addressing barriers to accessing everyday banking and payment services. It is supported by a Practice Note outlining options for helping individuals who face difficulties meeting standard onboarding requirements, including those arising from a lack of identification documents, disability, financial hardship or domestic violence. Under the MoU, participating providers have agreed to develop and implement plans outlining how they will identify and support individuals who might otherwise be unable to access basic transaction services. An accompanying Practice Note sets out illustrative approaches to more inclusive onboarding, including accepting alternative identification, allowing delayed identity verification, using credible referee statements or public sector documentation, and applying electronic identity verification. Providers may also consider proportionate risk controls, such as transaction limits and enhanced monitoring, alongside specialist staff support and referral arrangements. These approaches remain discretionary and must comply with applicable legal and regulatory obligations, particularly anti-money laundering and countering financing of terrorism requirements. Providers retain responsibility for customer onboarding decisions and may decline applications where relevant risks cannot be appropriately managed. The framework also establishes arrangements for monitoring implementation and measuring outcomes. Participating providers have agreed to share their implementation plans with RBNZ, report information on a best endeavours basis using a standardised reporting template and meet annually with the central bank to review progress and implementation challenges.
The Reserve Bank of India has revised its commercial bank leverage ratio framework to align with Basel's 2017 standard, specifying minimum ratios of 4% for domestic systemically important banks and 3.5% for other banks, alongside additional buffers and capital distribution constraints for global systemically important bank branches. The amendments revise exposure calculations for derivatives, securities financing transactions and off-balance sheet items, with restrictions on netting and collateral recognition. Effective April 1, 2027, the framework also requires quarterly supervisory reporting and enhanced leverage ratio disclosures.
The Reserve Bank of India has amended its leverage ratio framework for commercial banks to align with the Basel Committee on Banking Supervision’s 2017 standard, specifying minimum capital requirements, additional buffers for global systemically important bank branches and revised exposure measurement rules. The minimum leverage ratio is set at 4% for domestic systemically important banks and 3.5% for other banks. Indian branches of global systemically important banks (G-SIBs) must maintain a ratio of 3.5% plus their applicable G-SIB leverage ratio buffer, including any additional requirement imposed by their home regulator. Branches that fail to meet applicable risk-based capital or leverage ratio buffer requirements face capital distribution constraints, with the stricter capital conservation requirement applying where both are breached. The revised framework specifies how banks must measure exposures across on-balance sheet assets, derivatives, securities financing transactions (SFTs) and off-balance sheet items, generally requiring gross measurement and restricting collateral recognition and netting. Banks using the standardised approach for counterparty credit risk must calculate derivative exposures using a multiplier of 1.4 applied to the sum of replacement cost and potential future exposure, with specific treatments for cash variation margin, client clearing and written credit derivatives. SFT exposures must include gross recognised assets and counterparty credit risk exposures, with netting permitted only under prescribed conditions. Off-balance sheet exposures are measured using applicable credit conversion factors. The amendments also clarify the treatment of cash pooling arrangements and securitisations, and permit the temporary exclusion of central bank reserves from exposure calculations in exceptional macroeconomic circumstances, subject to a corresponding increase in minimum leverage requirements.
The European Securities and Markets Authority has finalised draft standards specifying the conditions for exempting derivatives transactions resulting from post-trade risk reduction services from the clearing obligation under EMIR 3. Eligible exercises must reduce overall portfolio risk, preserve market risk within minimal tolerances and avoid increasing aggregate net uncleared risk. The standards also establish requirements for service providers covering algorithms, transparency, controls, record-keeping and supervisory reporting, and await European Commission endorsement.
The European Securities and Markets Authority (ESMA) has published its final draft regulatory technical standards specifying the conditions under which over-the-counter derivatives transactions resulting from post-trade risk reduction (PTRR) services can benefit from the clearing obligation exemption under EMIR 3. The standards cover portfolio compression, portfolio rebalancing, basis risk optimisation and combinations of these services, including exercises involving both cleared and uncleared transactions. To qualify for the exemption, PTRR exercises must reduce the overall risk of each participating portfolio, preserve market risk within minimal tolerances set by participants and avoid increasing aggregate net uncleared risk in any portfolio. The draft standards establish operating requirements for PTRR service providers covering transparency, algorithms, governance, controls and record-keeping. Providers must ensure that their algorithms operate without discrimination, verify the eligibility and integrity of submitted portfolio data, and conduct checks to prevent circumvention of the clearing obligation. Participants must receive sufficient information to assess proposed transactions and can only accept or reject an exercise in full. Providers must also maintain dedicated conflicts of interest arrangements, retain records demonstrating compliance for at least 10 years, and submit annual compliance confirmations and reports to their competent authorities, alongside prompt notifications of material changes or non-compliance. Following consultation feedback, ESMA has largely retained its original proposals, including a flexible approach to risk measurement without prescribing quantitative tolerance thresholds or specific risk metrics. It has also recommended allowing existing exercise documentation to satisfy relevant record-keeping requirements under MiFIR, where the necessary information is included. The draft standards have been submitted to the European Commission for endorsement.
The Bank of Spain and the Bank of Portugal have agreed to establish a joint post-quantum cryptography cooperation programme to address cybersecurity and systemic risks arising from an uncoordinated transition to quantum-resistant technologies. The three-phase programme will cover information sharing, assessments of shared dependencies and migration priorities, and potential technical and interoperability testing, supported by a planned industry working group.
The Bank of Spain and the Bank of Portugal have signed a memorandum of understanding to establish a joint cooperation programme on post-quantum cryptography, aimed at addressing emerging cybersecurity and financial stability risks associated with quantum computing. The initiative reflects concerns that an uncoordinated transition to quantum-resistant technologies could create systemic risks, particularly given financial institutions’ reliance on shared service providers, financial market infrastructures and interconnected systems. The programme will proceed in three phases. The first will focus on exchanging information, best practices and common methodologies. The second may involve assessing shared dependencies, the readiness of the financial ecosystem and priorities for migrating to quantum-resistant technologies. The third may include technical testing, interoperability assessments and analysis of emerging technologies. An industry working group is expected to support the second and third phases, facilitating coordination between financial institutions and supervisors
The financial supervisory authorities of Denmark, Finland, Iceland, Norway and Sweden have agreed to deepen cooperation to promote more consistent supervision across integrated Nordic financial markets. Priorities include aligning supervisory practices under the Market Abuse Regulation and coordinating implementation of new payment services rules, including exploring common supervisory guidance. Concrete progress is targeted ahead of their August 2027 meeting.
The financial supervisory authorities of Denmark, Finland, Iceland, Norway and Sweden have agreed to strengthen Nordic supervisory cooperation, prioritizing greater consistency in market abuse supervision and coordinated implementation of new payment services rules. Notably, the authorities intend to use regional cooperation more systematically to align supervisory practices, address challenges arising from cross-border financial activity and reduce fragmentation across integrated Nordic financial markets. They aim to deliver concrete progress in both priority areas ahead of their next meeting in Stockholm in August 2027. Under the Market Abuse Regulation, the authorities will compare national supervisory practices and identify opportunities for greater alignment to support more consistent and predictable supervisory outcomes. For the new Payment Services Directive and Regulation, they will coordinate implementation and application, including related Level 2 and Level 3 measures, and identify areas where common Nordic supervisory approaches or guidance could be developed instead of separate national approaches. More broadly, the authorities envisage closer information sharing, exchanges of supervisory experience and, where appropriate, coordinated supervisory activities involving firms and activities with significant cross-border relevance, while preserving their respective national mandates and responsibilities.
The Swiss Financial Market Supervisory Authority (FINMA) has approved Switzerland’s first retail ETF investing directly in Bitcoin, granting an exemption from risk diversification rules based on Bitcoin’s trading history and volume. Supervised institutions must address operational and custody risks, disclose investment risks clearly and comply with Financial Services Act conduct rules, particularly suitability assessments. FINMA cautioned that Bitcoin’s volatility continues to expose investors to substantial losses despite the ETF’s approval.
The Swiss Financial Market Supervisory Authority (FINMA) has approved Switzerland’s first exchange-traded retail fund investing directly in Bitcoin. The approval includes an exemption from applicable risk diversification rules and requires safeguards addressing operational and custody risks, clear risk disclosures and compliance with investor protection rules at the point of sale. The ETF is classified under Swiss law as an “other fund for alternative investments” with a specific risk. The diversification exemption reflects Bitcoin’s long trading history and particularly high trading volume compared with other cryptocurrencies. Supervised institutions must mitigate operational and custody risks in line with guidance published on Jan. 12, 2026, and clearly highlight and explain risks in fund documents. The retail approval follows FINMA’s 2021 authorization of a fund for qualified investors investing primarily in a basket of cryptocurrencies. Other providers have submitted or announced applications for Bitcoin ETFs. FINMA stressed that approval does not reduce Bitcoin’s high market risk, and cryptocurrency volatility can cause investors to lose a substantial portion of their invested capital.
TheUK Financial Conduct Authority is consulting on how firms should manage operational resilience and financial crime risks when using decentralised finance. The proposals emphasise firms' accountability for service dependencies, testing resilience to disruptions and adapting due diligence, monitoring and transfer information controls to decentralised transactions. Publication of the final guidance is planned for the first quarter of 2027
The Financial Conduct Authority (FCA) is consulting on guidance explaining how existing operational resilience and financial crime requirements apply when firms use or facilitate access to decentralised finance (DeFi). The proposals are aimed primarily at authorised firms, including those undertaking future regulated cryptoasset activities. For operational resilience, firms in scope must identify important business services, set impact tolerances and map supporting resources. Mapping should capture relevant dependencies on smart contracts, blockchain infrastructure and external providers, alongside protocol governance and change controls. Scenario testing should assess whether services can remain within impact tolerances during severe but plausible disruptions. Firms remain responsible for external dependencies, even where arrangements do not constitute outsourcing, and must assess concentration risk and recovery limitations. They must also maintain communications with clients during incidents. The underlying operational resilience requirements will apply to all cryptoasset firms from October 2027. For financial crime, risk assessments should consider how limited customer identification and complex flows across protocols and blockchains affect exposure to money laundering, terrorist financing and proliferation financing. Due diligence and ongoing monitoring should reflect exposure to illicit or sanctioned wallets and services, concealment technologies and unusual transaction patterns. Enhanced due diligence is required where money laundering or terrorist financing risk is higher. Firms must meet applicable suspicious activity reporting and Travel Rule obligations. For transfers involving DeFi, including non-custodial wallets, firms should assess their ability to meet transfer information requirements and maintain procedures for missing data.
French authorities have published joint proposals to revise the Markets in Crypto-Assets Regulation, seeking clearer interaction with other financial rules while maintaining distinct legal regimes. The proposals support euro stablecoins and tokenized deposits, alongside conditions on access to global crypto liquidity and safeguards for stablecoins issued both inside and outside the European Union. They also seek stronger European supervision and enforcement, together with clearer intermediary responsibilities and protections for decentralized finance, staking and crypto lending.
France’s Directorate General of the Treasury, Financial Markets Authority, Bank of France and Prudential Supervision and Resolution Authority have published a joint response to the European Commission’s consultation on the Markets in Crypto-Assets Regulation (MiCA). The response addresses the need for clearer regulatory boundaries and the framework for stablecoins, tokenized deposits and access to global crypto liquidity. It also sets out proposals for stronger European supervision and safeguards for decentralized finance and related services. On regulatory boundaries, the proposals seek better coordination and gradual convergence between crypto-asset and traditional financial rules as the sectors become more closely connected. Their legal regimes would remain distinct, with financial and payment instruments fully subject to their respective sectoral legislation regardless of technology. This would preserve consistent regulatory treatment when instruments are tokenized. Clarifying how MiCA interacts with those frameworks would also address overlapping obligations where firms require multiple authorizations. The proposals support wider use of euro stablecoins and tokenized bank deposits for payments involving third countries and tokenized finance, while preserving wholesale central bank money’s preferred role in settling financial transactions. Providers authorized in the European Union (EU) would be explicitly prohibited from servicing stablecoins that do not comply with MiCA. Access to global crypto liquidity would be preserved through regulated providers, subject to equivalent protections and reciprocity. For fungible stablecoins issued in both the EU and third countries, the proposed framework would require regulatory equivalence assessments, supervisory cooperation and additional safeguards for reserves and redemption rights. The authorities propose strengthening the European Securities and Markets Authority’s supervisory role over significant crypto-asset service providers and conglomerates’ crypto activities. The proposed changes include broader significance criteria to bring more providers under European supervision and consolidated reporting by crypto conglomerates to help supervisors assess group exposures and contagion risks. The response also calls for coordinated action against unauthorized providers across the European Union. Alongside these supervisory measures, the authorities propose adapting prudential requirements to better reflect firms’ risks, including a regime for significant providers equivalent to that applicable to investment firms. Finally, the authorities also advocate for a proportionate framework for decentralized finance that assigns clear responsibilities to intermediaries and combines due diligence with protocol certification. They also recommend specific requirements for regulated intermediaries offering or facilitating staking or crypto lending and borrowing, covering transparency about remuneration and potential losses, alongside safeguards for client assets.
The UK Pensions Regulator has issued guidance calling on pension scheme trustees to identify and manage hidden AI-related concentration risks across their entire investment portfolios, including exposures that may be obscured by diversification across sectors and asset classes. Trustees are expected to assess aggregate exposure, stress-test portfolios against severe market downturns, challenge investment managers and take proportionate action where needed. Defined contribution schemes should also prepare member communication plans to mitigate the risk of harmful short-term investment decisions during market stress.
The UK Pensions Regulator (TPR) has issued guidance setting out expectations for pension scheme trustees to identify and manage potentially hidden concentration risks arising from artificial intelligence (AI) related investments. As AI investment increasingly spans technology, infrastructure, energy, real estate and financial assets, apparently diversified portfolios may be exposed to common risks that could trigger correlated losses during a market downturn. Trustees are expected to assess direct and indirect AI-related exposure across their entire portfolios, test investment resilience under stressed market conditions and take proportionate action reflecting their scheme's circumstances. The guidance highlights how concentration can build within passive market capitalisation-weighted strategies as AI-related company valuations rise, while overlapping holdings and correlations across actively managed funds may obscure aggregate exposure. Trustees should work with advisers and investment managers to identify these exposures, including within default arrangements, and conduct scenario analysis of severe but plausible downturns in AI-related assets. Assessments should consider potential losses, liquidity demands, changes in asset correlations and whether diversification remains effective within the scheme's risk appetite. Trustees should also challenge managers on their concentration risk assessments, stress testing assumptions, the potential amplification of losses through liquidity or leverage, and how additional debt or equity issuance could affect exposure. For defined contribution arrangements, TPR also expects trustees to establish clear, proportionate communication plans that can be implemented quickly during a material market downturn. These should help reduce the risk of members making short-term investment decisions that crystallise losses or undermine longer-term retirement outcomes.
The UK Financial Conduct Authority has identified significant variations and weaknesses in private market firms’ management of conflicts of interest, with some governance and control frameworks failing to keep pace with increasingly complex activities. Key shortcomings concern cross-fund and connected transactions, gifts and entertainment, information barriers and insufficient independent oversight.
The UK Financial Conduct Authority (FCA) has published findings from a multi-firm review of conflicts of interest in private equity, private credit and real estate, identifying significant variations in governance, oversight and controls. While some firms demonstrated effective arrangements, others had failed to adapt their conflicts management frameworks to increasingly complex business models, investment structures and ownership arrangements. The review identified recurring weaknesses in cross-fund transfers, continuation vehicles and other connected transactions, where competing investor interests create risks relating to pricing, valuation and transaction terms. Some firms relied on overlapping decision-makers, existing approval processes or investor consent without sufficient independent challenge or evidence that competing interests had been balanced fairly. Stronger practices included separating decision-making responsibilities, obtaining independent valuations and applying enhanced transaction oversight. Other shortcomings concerned gifts and entertainment, where firms did not consistently assess inducement risks or cumulative hospitality exposure, and information barriers, where informal safeguards and staff judgement were not always supported by effective restrictions and compliance monitoring. The FCA also identified weaknesses in investment allocation practices and the timely identification and escalation of conflicts throughout the investment lifecycle.
Germany's Federal Ministry of Justice and Consumer Protection and Federal Ministry of Finance have proposed making natural hazard coverage standard in new residential building insurance policies and automatically extending existing policies after a one-year transition period. Standard deductibles would be capped at EUR 20,000 per claim, while a possible lower cost alternative would allow deductibles of up to EUR 100,000. The proposal also addresses premium transparency and potential protections against passing insurance costs to tenants.
Germany's Federal Ministry of Justice and Consumer Protection and Federal Ministry of Finance have jointly proposed changes to residential building insurance that would make coverage against natural hazards, including flooding and heavy rainfall, standard in new and existing policies. Under the proposal, all new residential building insurance policies would include natural hazard coverage, while existing policies would be automatically extended after a one-year transition period unless policyholders had already arranged qualifying coverage. Standard coverage would include flooding, heavy rainfall and other specified natural hazards, with deductibles capped at 10% of the sum insured or EUR 20,000 per claim, whichever is lower. The proposal aims to address a protection gap, as only 59% of residential buildings are insured against natural hazards, despite approximately 98% having building insurance. During the transition period, insurers would have to offer existing policyholders coverage meeting the new requirements. Following automatic extensions, insurers could adjust premiums but would have to disclose the underlying risk factors, including property risk classifications. The government is also considering allowing policyholders to choose cheaper minimum coverage, with deductibles capped at 50% of the sum insured or EUR 100,000, whichever is lower. Additional measures under consideration include restricting landlords from passing natural hazard insurance costs to tenants and reflecting property-level preventive measures in premiums. The ministries will discuss the proposals with federal states and representative associations before preparing draft legislation.
Germany's Federal Financial Supervisory Authority is consulting on replacing its combined large exposures and million loans regulation with a standalone large exposures framework following the abolition of million loan reporting from December 30, 2026. The proposal would retain existing large exposure requirements while removing obsolete reporting provisions and updating related supervisory regulations. The final million loan reporting reference date was September 30, 2026.
Germany's Federal Financial Supervisory Authority (BaFin) has launched a consultation on proposed regulatory amendments following the abolition of million loan reporting under the German Banking Act from December 30, 2026. The proposal would replace the existing Large Exposures and Million Loans Regulation with a standalone Large Exposures Regulation, preserving the rules governing large exposures while removing provisions relating to million loan reporting. It would also amend related supervisory regulations to align them with the revised legal framework. The abolition aims to eliminate duplicate reporting, with BaFin and the Deutsche Bundesbank expecting to continue monitoring exposures to individual borrowers and borrower groups using other data sources, including AnaCredit. The proposed Large Exposures Regulation would retain existing provisions on exemptions from large exposure limits, management approval requirements and large exposure reporting. These include exemptions for certain intragroup exposures, subject to supervisory conditions, and requirements for institutions to report borrower and connected client master data to the Deutsche Bundesbank. Such data would generally be due by the 15th business day of the month following the relevant reporting date, while institutions would be required to retain reports for the current and two preceding calendar years. The draft would also provide greater flexibility for the electronic submission of borrower master data. Additional amendments would update the Housing Companies Solvency Regulation and Audit Reports Regulation by replacing obsolete references to the German Banking Act with corresponding EU provisions or incorporating existing definitions directly into the regulations. The Investment Firms Notification Regulation would also be amended to remove provisions and references relating to million loan reporting. The final reporting reference date for million loans was September 30, 2026, with the proposed changes taking effect on December 30, 2026.
The Bermuda Monetary Authority has updated funding, governance and reporting guidance for general business insurers using segregated or separate accounts, applying to financial years beginning on or after 1 January 2027. Each cell must meet solvency requirements independently and be fully funded or fully collateralised, with insurers’ boards retaining responsibility for governance and risk oversight even where activities are outsourced. Approved auditors will perform Agreed Upon Procedures on the existing Schedule of Segregated Accounts, supported by annual principal representative confirmations of the schedule’s accuracy and collateral adequacy.
The Bermuda Monetary Authority has published updated guidance for general business insurers using segregated accounts or separate accounts, clarifying funding and governance expectations for individual cells and introducing Agreed Upon Procedures for their reporting. The guidance covers limited purpose and commercial insurers and takes effect on 1 January 2027, applying to financial years commencing on or after that date. Each cell must meet solvency requirements independently and maintain capital and liquidity appropriate to its risks. Business must be fully funded to the reserve provision or fully collateralised to the contract’s maximum aggregate exposure. Underwriting, reserving and distribution decisions cannot rely on the insurer’s consolidated capital position. For fully collateralised business, collateral must be contributed by the insurance contract’s effective date. Limited recourse clauses cannot substitute for actual funding. Insurers’ boards remain responsible for overseeing funding arrangements and cannot delegate their governance and risk oversight responsibilities, including where activities are outsourced. Approved auditors will perform Agreed Upon Procedures on the Schedule of Segregated Accounts, which has been in place since 2018, without increasing the number of annual reporting forms. The schedule is outside the statutory audit’s scope, although individual cell information must be audited subject to the approved auditor’s materiality threshold. Principal representatives must annually confirm the schedule’s accuracy and collateral adequacy. Remediation plans for cells in deficit should be provided to auditors and kept up to date.
The Financial Action Task Force of Latin America (GAFILAT) has published a regional assessment finding that proliferation financing risks remain inadequately addressed despite relatively established legal frameworks and low to moderate regional exposure. The assessment identifies substantial gaps in export controls, interagency coordination and supervision of high risk sectors, as well as limited detection and investigation activity, with 12 of the 16 surveyed jurisdictions reporting no proliferation financing-related suspicious transaction reports and 14 reporting no investigations over a 10-year period.
The Financial Action Task Force of Latin America (GAFILAT) has published a regional risk assessment identifying uneven implementation of measures to combat the financing of weapons of mass destruction proliferation. Although the region's overall exposure is assessed as low to moderate, vulnerabilities persist in sanctions enforcement, export controls and supervision of high-risk sectors. The assessment, drawing on information from 16 jurisdictions, examines risks across financial institutions, dual-use goods, maritime shipping, free trade zones, designated non-financial businesses and professions, and virtual asset service providers (VASPs). It finds that financial institutions have the greatest exposure to proliferation financing but also the most developed controls, while weaknesses in other sectors create opportunities for sanctions evasion involving North Korea and Iran. Despite relatively established legal frameworks, operational effectiveness remains limited. Fourteen of the 16 surveyed jurisdictions reported frameworks for implementing United Nations targeted financial sanctions, but only 10 require financial institutions to conduct proliferation financing risk assessments. Twelve jurisdictions reported no proliferation financing-related suspicious transaction reports, while 14 reported no investigations over a 10-year period. The assessment also identifies limited comprehensive export control systems for dual-use goods, insufficient information sharing between export control and financial crime authorities, and uneven supervision of maritime activities, corporate service providers and VASPs. These weaknesses are compounded by the region's substantial transit and transshipment activities, widespread free trade zones and increasing use of virtual assets, which can facilitate sanctions evasion despite relatively low direct exposure to proliferation activities. GAFILAT recommends prioritizing the completion of national proliferation financing risk assessments under the Financial Action Task Force standards ahead of the fifth round of mutual evaluations. It calls for stronger export controls, operational coordination between financial and trade authorities, and improved detection and investigation capabilities.
The South African Reserve Bank is consulting on a Synthetic Financial Centre framework that would let approved institutions manage qualifying foreign portfolios and foreign currency activities from South Africa. Exposure would remain attributable to investors under their applicable limits or allowances, with participants required to segregate operations, use approved foreign currency funding and report exposures. A later phase would consider broader capital market reforms, including foreign currency securities issuance and investment vehicle domiciliation.
The South African Reserve Bank has published a draft framework for establishing a Synthetic Financial Centre (SFC), which would allow approved institutions to manage foreign investment portfolios and conduct specified foreign currency activities from South Africa. The first phase would extend existing arrangements for managing foreign assets and treasury activities beyond corporate structures to institutional investment management. The SFC would operate through ring-fenced arrangements within South Africa's existing regulatory framework, rather than as a separate financial jurisdiction or market. Eligible participants would include appropriately licensed and registered financial institutions, such as investment managers, certain private equity fund managers and authorised dealers. Foreign financial services providers could also participate once they obtain the necessary approvals. Foreign exposures managed through the SFC would remain attributable to the underlying investors and count against their applicable prudential or macroprudential foreign limits or individual investment allowances, rather than the managing institution's own limits. Non-residents could invest without restriction. Qualifying portfolios would need to be predominantly foreign in their underlying economic exposure, with any incidental South African assets retaining their domestic classification. Participants would be required to segregate SFC activities from other business, maintain dedicated foreign currency accounts funded from approved sources, and submit quarterly reports on foreign exposures and financing arrangements. A potential second phase would consider broader reforms to enable the issuance, listing and trading of foreign currency-denominated securities in South Africa, alongside investment vehicle domiciliation and supporting market infrastructure. These measures would be subject to further regulatory assessment and consultation.
Saudi Arabia's Capital Market Authority has launched a consultation on enhanced annual board report disclosures requiring listed companies to provide a dedicated analysis of their financial and operational performance. The proposals cover material changes in financial results, key performance indicators, liquidity, capital resources and factors affecting future performance. Compliance would become mandatory for Main Market companies following approval, with Parallel Market companies subject to a phased implementation.
Saudi Arabia's Capital Market Authority (CMA) has launched a consultation on proposed requirements to strengthen financial and operational disclosures in listed companies' annual board reports. The draft would consolidate existing disclosure provisions into a dedicated section titled “Discussion and Analysis of Financial and Operational Performance and Financial Position” and introduce more detailed requirements for explaining company performance, material financial changes, liquidity and capital resources, as well as trends and uncertainties that could affect future results. The proposed section would require companies to analyse financial and operational performance against the previous financial year, explaining material changes in revenue, costs, profitability and operating results. Where material, the analysis would incorporate relevant financial and non-financial key performance indicators, such as profitability margins, returns on capital or equity and operational efficiency measures. Companies would also assess liquidity, solvency, cash flows, working capital and capital resources, including material changes in their financial position, financing arrangements and ability to meet financial obligations. In addition, disclosures would address material internal and external trends, developments and uncertainties reasonably expected to affect future business performance or financial position. The proposed requirements would become mandatory for companies listed on the Main Market from the first board report issued after approval of the regulatory provisions. For companies listed on the Parallel Market, the requirements would initially apply on an indicative basis before becoming mandatory from the first annual board report issued in the year following approval.
The Central Bank of Egypt hosted training on incorporating climate risks into micro and macro stress tests for 25 participants from 11 COMESA central banks, alongside a COMESA Monetary Institute delegation. Building on broader stress testing training in 2025, sessions combined modelling applications with exchanges on supervisory challenges. Resulting recommendations are intended for discussion by central bank governors in Malawi in November 2026.
The Central Bank of Egypt hosted a five-day training programme on integrating climate risks into micro and macro stress testing, attended by 25 participants representing 11 COMESA central banks, alongside a COMESA Monetary Institute delegation. Held at the Egyptian Banking Institute in Cairo, the programme focused on assessing climate risks and their effects on banks and financial stability. It gave dedicated attention to climate risk, which was among the risks covered in the bank’s broader stress testing training for COMESA central banks in 2025. Practical sessions covered the integration of climate risks into stress testing frameworks using econometric models, with applications addressing credit risk, liquidity, climate change and interbank contagion. Participants exchanged supervisory experience and discussed challenges associated with climate risks. The programme concluded with proposals and recommendations to deepen central banks’ understanding of climate risk integration in stress testing, for discussion by central bank governors at their annual meeting in Malawi in November 2026.
The Office of the Comptroller of the Currency has adopted payment stablecoin rules taking effect on January 18, 2027. Existing U.S. issuers with substantially complete applications pending by that date may seek waivers from prior approval for up to 12 months. Revised reporting forms remain open for comment, with initial weekly and quarterly report dates proposed for January 25 and March 31, 2027, respectively, subject to Office of Management and Budget approval.
The U.S. Office of the Comptroller of the Currency (OCC) has finalized payment stablecoin rules effective January 18, 2027, alongside guidance on temporary waivers and revised reporting proposals. The rules implement the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act for permitted and foreign payment stablecoin issuers under OCC jurisdiction and certain custody activities conducted by entities it supervises. They establish requirements for reserves, redemption and risk management, together with capital, licensing and supervisory standards. Separate rulemaking will address requirements relating to the Bank Secrecy Act, anti-money laundering and Office of Foreign Assets Control sanctions. Beginning January 18, 2027, issuing payment stablecoins in the United States will generally require approval as a permitted payment stablecoin issuer, with issuance without the required approval carrying criminal penalties. Existing issuers operating in the United States with substantially complete applications pending with the OCC by that date may request temporary waivers. The OCC generally expects to grant waivers from the prior approval requirement for these issuers unless more compelling reasons justify denial. Waivers may last no longer than 12 months beginning January 18, 2027. The agency has identified no generally applicable compelling grounds for waiving other requirements or allowing prospective issuers to begin operations before approval. The OCC will announce when it begins accepting applications and waiver requests following Office of Management and Budget (OMB) approval of the application information collection. Applicants will receive notice within 30 days of receipt whether their applications are substantially complete, with decisions due no later than 120 days after a determination of substantial completeness. Separately, revised weekly and quarterly reporting forms for permitted payment stablecoin issuers and foreign payment stablecoin issuers registered with the OCC have been published for comment. Subject to OMB approval, the initial report dates would be January 25, 2027, for weekly reporting and March 31, 2027, for quarterly reporting.
The National Association of Insurance Commissioners (NAIC) found in its annual cyber insurance market report that US domestic direct written premium has nearly tripled since 2020 to USD 7.46 billion. In 2025, policies in force rose 33% and claims rose 20%. Profitability is weakening, with the loss ratio climbing to 53% from 48.7% during an eighth consecutive quarter of rate cuts, driven by primary policies and sharply higher claim severity for large businesses. The report also highlights potential pressure on rate adequacy from rising loss costs, attacks enabled by artificial intelligence and correlated exposure to shared technology providers.
The National Association of Insurance Commissioners (NAIC) published its Report on the Cybersecurity Insurance Market for the 2025 reporting year, showing continued growth alongside rising losses. US domestic cyber direct written premium has nearly tripled since 2020, from USD 2.75 billion to USD 7.46 billion. Domestic policies in force rose 33% to 5.84 million in 2025, and reported claims increased 20% to 56,323. Expected losses are rising, yet rates have now fallen for eight consecutive quarters. Industry analysis cited in the report suggests this divergence could test rate adequacy over the intermediate term. Premium growth has moderated. Total US premium, including alien (international) surplus lines carriers, rose 3.5% to about USD 9.46 billion, a return to growth after the market's first contraction on record in 2024. Policy growth came largely from cyber endorsements to other commercial policies. These endorsements now account for nearly two thirds of policies in force but only about 4% of premium. The market is splitting into two segments. Surplus lines carriers write standalone cyber policies and hold nearly two thirds of premium, while admitted carriers focus on endorsements. The industry loss ratio rose to 53% from 48.7%, its highest level since the ransomware spike of the pandemic era, with deterioration concentrated in primary business. Claims cost pressure is concentrating among businesses with annual revenue of USD 1 billion or more. Their average claim severity roughly doubled to about USD 4.4 million, even as their claim frequency fell. The threat environment points to further pressure. Exploitation is accelerating and attackers increasingly use artificial intelligence (AI). Losses can also accumulate across policyholders that rely on the three cloud providers holding over 60% of global cloud infrastructure. The report also flags divergent war exclusion wording across carriers as a source of coverage uncertainty that regulators could monitor for consumer protection and solvency implications.
The US administration moved on two fronts to expand homeownership. US President Donald Trump signed an executive order directing the Federal Housing Finance Agency to have Fannie Mae and Freddie Mac pilot proactive cancellation of mortgage insurance and make permanent a nationwide alternative to lender's title insurance on refinances. The US Department of the Treasury proposed rules for the 21st Century ROAD to Housing Act ban on large institutional investors buying single-family homes from January 7, 2027, setting conditions for exceptions covering new construction, rehabilitation of deficient homes and programs that help renters buy.
The US administration took two parallel steps aimed at making homeownership more affordable and accessible. US President Donald Trump signed an executive order to lower the cost of obtaining and holding a mortgage. The US Department of the Treasury proposed rules implementing Section 1001 of the 21st Century ROAD to Housing Act (ROAD Act), which limits competition from large investors for homes that families could otherwise buy. From January 7, 2027, the provision bars large institutional investors from purchasing single-family homes unless a purchase qualifies for a statutory exception. On costs, the order directs the Director of the Federal Housing Finance Agency (FHFA) to have the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) pilot the proactive cancellation of mortgage insurance on new loans. Cancellation would follow once automated valuation models show that borrowers meet equity requirements based on current market value. The existing title acceptance pilot is to become an ongoing nationwide program, allowing an automated title review to replace a lender's title insurance policy on eligible refinances. The order also creates a task force to lower the cost of building manufactured and factory-built homes and directs the Departments of Agriculture and Veterans Affairs to cut rates on their direct home loans. On access, the ROAD Act ban covers investors with control over at least 350 single-family homes. Treasury's proposal, the first phase of its rulemaking, steers the main exceptions toward purchases that add housing supply or help renters become owners. Build-to-rent purchases would be limited to homes never owner-occupied, bought within 18 months of their certificate of occupancy and first rented out. Renovate-to-rent purchases would require repairing structural or core system deficiencies, with improvements worth at least 15 percent of the structure's value. Investors running renter homeownership programs would need to contribute meaningful financial support toward a purchase. A safe harbor treats support of USD 5,000, or less for lower-priced homes, as meaningful for renters of at least five years.
Monetary policy developments
Decisions during the week of October 19 continued to favour maintaining tight policy. The Philippines accelerated tightening with a 50 bp increase to 5.50%, responding to rising underlying inflation and higher oil and transport costs, with inflation expected to remain high in 2027 and approach its 3% target only in 2028. South Korea paused after two consecutive increases to assess their effects, but continued to signal further tightening: strong exports and investment were supporting demand, while accumulated cost pressures were expected to keep inflation above target for a considerable period. Türkiye and Kazakhstan reduced rates as underlying inflation continued to slow, but both stressed that policy remained tight, and Kazakhstan signalled that no further change was likely before year-end given proinflationary risks. The remaining central banks held rates. Russia reported faster price growth in the third quarter and inflation expectations near two-year highs, while Georgia revised its inflation forecast higher as the energy shock persisted, although its impact on expectations remained moderate. Indonesia prioritised rupiah stability amid external pressures while seeking to maintain sufficient bank liquidity. In Hungary, below-target inflation was weighed against high energy prices, rising yields and fiscal uncertainty. Israel faced a weaker shekel and continued geopolitical uncertainty despite inflation slightly below the target midpoint, while Paraguay reported low inflation and anchored expectations but flagged energy costs and tighter US policy as risks.