A round-up of financial services developments, including (among other things) BoE and PRA respond to government request for information on AI innovation in financial services.

The International Swaps and Derivatives Association (ISDA) has published a paper on assessing the EU clearing landscape following the implementation of the European Market Infrastructure Regulation 3.0 (EMIR 3.0). ISDA stated that the Active Account Requirement (AAR) has strengthened the operational resilience of EU counterparties by requiring certain firms to maintain clearing accounts at EU central counterparties (CCPs), providing fallback arrangements in the event of operational disruption or stress at third-country CCPs. The paper noted that clearing activity at EU CCPs, including Eurex, has increased since the introduction of the AAR, although ISDA said it remains too early to assess the full impact of the regime. ISDA argued that existing supervisory powers under EMIR 2.2 already address financial stability risks linked to UK CCPs and called on the European Commission to grant stable, non-time-limited equivalence for UK CCPs to preserve EU firms’ access to global liquidity pools. The paper also proposed additional measures to improve the competitiveness and attractiveness of EU CCPs, including promoting voluntary clearing by public entities, enabling cross-margining, facilitating centrally cleared repo transactions, supporting the use of tokenised collateral and strengthening the EU porting framework.

The United Nations Environment Programme Finance Initiative (UNEP FI) has published guidance, co-developed with Equator Principles, on nature-based risk assessment (NBRA) to help financial institutions (FIs) evaluate risks arising from nature loss such as accelerating biodiversity decline, water stress, soil degradation and declines in natural capital. The guidance emphasises that integrating project-related finance data can provide high-quality, location-specific insights that strengthen risk scoping, prioritisation, analysis and decision-making. It recommends that FIs involve project-related financing teams early in the NBRA process, adopt an iterative approach, clearly define roles and responsibilities and build senior-level support. FIs are also encouraged to collate and analyse project-level impacts and dependencies and to develop specific, measurable, achievable, relevant and time-bound (SMART) risk management actions to enhance long-term resilience. In addition, the guidance advises alignment with frameworks such as the Kunming–Montreal Global Biodiversity Framework, the Science Based Targets Network (SBTN) and the Taskforce on Nature-related Financial Disclosures (TNFD).

The Ministry of Justice (MoJ) has published the Chief Coroner’s Annual Report 2024, the first submitted by Her Honour Judge Alexia Durran following her appointment as Chief Coroner in May 2024. The report reviews the work of the coroner service across England and Wales during 2024 and highlights two priorities: addressing delays in cases lasting more than 12 months and improving the wellbeing and support available to coroners, including the creation of new lead roles. It notes a 10% fall in deaths reported to coroners compared with 2023, an increase in Prevention of Future Deaths reports and the introduction of the statutory medical examiner scheme. The report also covers disparities in resourcing and standards across coroner areas, security concerns at coroner’s courts, reforms to appointments and training, and the introduction of regional leadership coroners to improve consistency. Looking ahead, the Chief Coroner has committed to requiring jurisdictions to forecast long-duration cases and to prioritising measures to reduce stress and provide professional support for coroners.

The International Swaps and Derivatives Association (ISDA) has published a research note examining five years of global credit default swap (CDS) market activity from 2021–25, reporting that activity reached a record USD 41.8 trillion in 2025, surpassing the previous peak of USD 38.7 trillion in 2022. Index CDS drove the increase, accounting for 93.3% of total activity at USD 39.0 trillion, while single-name CDS activity stood at USD 2.8 trillion. The index-to-single-name ratio fell sharply to 8.5x in 2023 amid banking sector stress before recovering to 13.8x in 2025. Single-name CDS peaked at USD 3.3 trillion in 2023 following the failures of Silicon Valley Bank and other lenders. Index and single-name CDS responded differently to market events. During the 2020 coronavirus (COVID-19) pandemic and the 2025 US tariff shock, index CDS rose more sharply than single-name activity. CDX.NA.IG and iTraxx Europe together accounted for approximately 75% of index CDS activity in 2025, at 43.4% and 32.4% respectively. Market breadth remained stable, with 710–760 unique reference entities executed each quarter. Central clearing covered 78.1% of index CDS notional and 63.1% of single-name CDS notional in 2025. In H1 of 2026, total CDS trading reached USD 27.4 trillion, up 27.8% year-on-year, with index CDS rising 28.3% to USD 25.7 trillion and single-name CDS growing 19.8% to USD 1.7 trillion.

The Association for Financial Markets in Europe (AFME) has published its Q3 2025 Prudential Data Report, documenting regulatory developments across major jurisdictions alongside European globally systemically important banks' capital and liquidity positions. The report reveals that the Bank of England's Financial Policy Committee has reduced its Tier 1 capital benchmark from 14% to 13% of risk-weighted assets. In the EU, the European Central Bank's simplification task force has proposed reducing capital stack elements, revising the role and design of Additional Tier 1 and Tier 2 instruments, and aligning minimum requirement for own funds and eligible liabilities and total loss-absorbing capacity frameworks. The ECB has indicated a preference for a capital-neutral approach despite Eurozone banks currently maintaining the highest risk-based Tier 1 capital ratio among major banking jurisdictions. The report notes that regulators in the EU, US, UK, and Australia are advancing initiatives to simplify prudential frameworks, including streamlining capital stacks and revising stress test influences on capital surcharges. European G-SIBs maintained a Common Equity Tier 1 ratio of 14.4% in Q3 2025, with AT1 issuance reaching €8.22bn during the quarter.

The International Swaps and Derivatives Association (ISDA), Commodity Markets Council Europe, Energy Traders Europe and FIA have submitted a joint response on to the Financial Conduct Authority's (FCA)'s consultation CP26/8, supporting an increase in the commodity derivatives clearing threshold under UK European Market Infrastructure Regulation from €3bn to €6bn rather than the proposed €5bn. They argued that the threshold, which has not been reviewed for over a decade, has materially diminished in real terms due to inflation, sustained increases in commodity prices, expanded market participation and heightened volatility, and no longer reflects current market conditions or risks. The response explained that firms typically manage activity well below the formal threshold to avoid the costs and liquidity pressures associated with mandatory clearing and margining, meaning the effective threshold is significantly lower in practice and may create procyclical effects during periods of market stress. The organisations emphasised the distinct characteristics of commodity derivatives markets, which are closely linked to physical production and commercial risk management, and warned that an inadequately calibrated threshold risks constraining hedging activity, reducing liquidity and undermining UK competitiveness. They concluded that a higher interim threshold is necessary to support proportionate regulation and market functioning while HM Treasury undertakes its broader review of the UK EMIR clearing framework, and that the threshold should not be reduced below €6bn.

The Housing Ombudsman Service has found severe maladministration for how Peabody responded to reports of anti-social behaviour and noise nuisance for a significant period of time, which caused a resident and her terminally ill husband to end their tenancy. The husband, who died during the case, had been caused stress and anxiety due to the anti-social behaviour and noise nuisance. The resident’s ongoing reports of nuisance went unanswered for months on end, causing her to terminate the tenancy and rent another property to care for her terminally ill husband. Peabody’s inaction meant that it did not consider the guidance on supporting victims and witnesses as outlined in the Anti-social Behaviour, Crime and Policing Act 2014 (ABCPA 2014), or as described in the landlord’s own policies and procedures. As a result, the landlord has introduced specialist community safety teams to work with residents and communities on any anti-social behaviour issues and has created a dedicated complaints team. The Chief Executive at the landlord has been ordered to apologise to the resident personally, pay £2,000 in compensation, and review how it manages anti-social behavior.

The International Swaps and Derivatives Association (ISDA) and Futures Industry Association (FIA) have published a joint response to a Bank of England (BoE) discussion paper on central counterparty (CCP) resolution. The associations support greater ex-ante clarity on valuation capabilities and the boundary between recovery and resolution, while opposing creditor hierarchy changes that would weaken the no-creditor-worse-off safeguard. They stress that default fund contributions should not absorb non-default losses. Where clearing members or other creditors bear losses or provide resources in resolution, ISDA and FIA underline the importance of credible mechanisms to return value to them, with profit-sharing arrangements cited as one option. The associations also encourage the BoE to consider alternative loss-absorption sources, such as right-sized CCP equity and parent-group capacity, before drawing on clearing member resources. On partial tear-up, the associations support commercially reasonable pricing and recognise that a pro-rata approach may often be equitable, but emphasise assessing hedging, liquidity and contagion effects on non-defaulting members and clients. ISDA and FIA also support the BoE’s proposed resolvability outcomes but call for greater transparency on resolvability assessments and resolution planning, and for assessments to address how the BoE would coordinate with third-country authorities where a UK CCP resolution could transmit losses or disruption outside the UK.

TMT analysis: The claimant obtained £60,000 in general damages and £37,041.61 in special damages after suing her former partner for the misuse of private information and the intentional infliction of injury. The defendant had covertly recorded intimate images of the claimant and uploaded them to the internet, apparently for financial gain. The discovery of the images caused the claimant to suffer an emotional breakdown and develop post-traumatic stress disorder (PTSD) to the point that it caused a personality change. In addition to general damages for this distress/injury, the court awarded damages for consequential financial loss, including loss flowing from her immediate termination of the relationship on discovery of the conduct (including temporary accommodation costs, an aborted holiday and money spent on furniture for the couple’s home) as well as past and future healthcare costs and the estimated cost of removing material from the internet. It is believed that this is the first reported occasion in which the court has undertaken a full assessment of damages in a revenge porn/image-based abuse claim. Written by Iain Wilson, managing partner/head of Media and Communications Law at Brett Wilson LLP.

Ofgem has launched a call for input on draft special licence conditions for long-duration electricity storage (LDES) projects under the cap-and-floor scheme, seeking stakeholder views ahead of a statutory consultation expected in summer 2026. The proposed conditions would be implemented through modifications to the standard electricity generation licence and are intended to establish the operational framework for LDES projects awarded support under the regime. The draft addresses areas including revenue calculation methodologies, availability requirements, treatment of construction cost overruns, financial resilience provisions, and governance of the cap-and-floor financial models. Ofgem states that it is particularly seeking views on key policy areas such as the approach to setting floor levels, the treatment of market-related costs and optimiser fees, availability requirements for storage assets, and controls on structured transactions and revenue maximisation. Ofgem is also seeking evidence on developing policy issues, including obligations during system stress events, cybersecurity expectations, governance of algorithmic optimisation, and the potential consumer impacts of repetitive re-trading in electricity markets. The call for input closes on 20 April 2026.

This week's edition of Financial Services weekly highlights includes: FCA to launch Mastercard, PayPal and Visa competition law investigations; ESMA issues call for evidence on market structure of EU equity markets; ISDA publishes framework for counterparty credit risk internal models; plus dates for your diary.