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Tensions are growing between Downing Street and UK regulators over Boris Johnson’s flagship post-Brexit reform of the insurance sector, which aims to unleash an “investment big bang” in British infrastructure.
The prime minister told allies he was “getting impatient” over the pace of change to Solvency II rules and with what he believed were excessively cautious regulators. “He keeps asking why it isn’t happening,” said one.
Insurers have lobbied for years for the Solvency II regulatory regime to be amended, arguing that it requires them to hold too much capital and is too restrictive in setting the parameters for which assets they can invest in.
Johnson has suggested that insurance companies will put billions of pounds into infrastructure, including green energy schemes, after the overhaul.
But the Bank of England’s Prudential Regulation Authority, which supervises insurers, wants to make sure that any easing of the regulatory burden does not create risk to policyholders or the stability of companies.
Do you have any feedback on the newsletter? Tell us at firstname.lastname@example.org. Thanks for reading FirstFT Europe/Africa. Here’s the rest of today’s news — Jennifer
Five more stories in the news
1. Corporate fundraisings slide 25% during market rout Businesses globally raised $4.9tn through new bonds, loans and equity in the first half of 2022, down from $6.6tn in the first half of 2021 — a record-setting period — according to Refinitiv data, as a chill across capital markets left bankers and corporate finance chiefs wary.
2. UK trade performance plummets The country’s current account deficit was calculated at 8.3 per cent of gross domestic product in the first quarter of 2022, a deterioration from an average of 2.6 per cent across 2021 and the worst level since records began, piling more pressure on sterling and highlighting the economic impact of Brexit.
3. Russian forces withdraw from Snake Island Moscow pulled back from the strategic Black Sea outpost in what its defence ministry described as a “gesture of goodwill” to help restore Ukrainian grain shipments, but which Kyiv claimed was a humiliating retreat after its artillery bombardment.
Related read: Turkey’s Recep Tayyip Erdoğan has threatened to derail Sweden and Finland’s Nato membership bids again, demanding Stockholm extradite 73 people accused of terrorism.
Interview: European leaders must hold firm if they want to stop Vladimir Putin’s “war of exhaustion”, said the head of Ukraine’s state-run energy company.
4. France ready to bypass Hungary for global corporate tax deal Paris wants the EU to consider bypassing Hungary to secure a minimum corporate tax rate for big companies after Budapest last month blocked an agreement negotiated by 137 countries at the OECD, French finance minister Bruno Le Maire said yesterday.
5. London City airport’s big post-pandemic plans The airport has set out plans for significant expansion, including allowing more weekend flights and increasing the cap on passengers, to capitalise on the travel industry’s recovery after the coronavirus pandemic.
The days ahead
ECB ends bond-buying scheme The European Central Bank will wrap up part of its stimulus measures introduced a decade ago, to tamp down stubbornly high inflation.
Changing of the guard Brazil takes over the presidency of the UN Security Council for July, while the Czech Republic assumes the six-month presidency of the EU.
Economic data S&P Global manufacturing purchasing managers’ indices are out for France, Italy, the UK and the US. European consumer prices are expected to rise again in June. The UK publishes consumer credit figures while US manufacturing activity is set to have decelerated. (FT, WSJ)
Julian Assange deadline It is the last day for the WikiLeaks founder to launch an appeal against the UK’s decision to extradite him to the US to face espionage charges.
National Days Rwanda commemorates independence from Belgium while Somalia marks the country’s creation from British Somaliland and Italian Somaliland. Canada has a federal holiday celebrating the formation of the union of the British North America provinces that created Canada in 1868. On Sunday, Belarus marks Independence Day.
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What else we’re reading
Stolen millions and trophy cattle weigh on Cyril Ramaphosa The majestic longhorns of the Ankole were love at first sight for the future South African leader. But his expensive hobby of breeding the prized cattle has become his Achilles heel in an anti-corruption drive after a mysterious burglary raised questions about the transparency of his wealth.
The Swedish island where a third world war could start Experts say a Russian invasion of the Baltics could begin with Gotland, an idyllic 1,200-square-mile island that is one of the most strategically important locations in Europe. Military control of the “unsinkable aircraft carrier” would threaten not only Sweden but also Estonia, Latvia and Lithuania.
How to avoid a privacy apocalypse At the moment, we have the worst of both worlds: researchers struggle to access data because the people who have patient records (rightly) hesitate to share them. Yet leaks are almost inevitable because of patchy oversight. Tim Harford argues we need a new kind of data infrastructure.
Will crypto contagion infect mainstream finance? The cryptocurrency market carnage has had one silver lining: the broader financial system has been spared. Here’s why most regulators and industry heavyweights believe banks and asset managers are protected.
Enough of the nanny employer Employers were increasingly conscientious about attending to staff wellbeing during the pandemic, particularly mental health, often delving into matters that were previously viewed as personal. But have they encroached too far into our personal lives?
Food & drink
From glass bottles to linen napkins, freshly cut flowers to sandwiches for everyone, here’s how to host the perfect picnic.