The Rick Faries Gallery at Masterworks recently unveiled Metanoia, featuring artist Ajani Tucker.
The exhibition explores how digital processes shape and redefine our understanding of what’s real, transforming metaobjects into tangible art.
Through his vivid, motion-inspired works, Ajani Tucker blurs the lines between the digital and the physical.
Kendal Trott spoke Ajani about what inspired the show and what visitors can expect.
The attacks were the deadliest on French soil since World War Two, scarring the national psyche and prompting emergency security measures
International News via Reuters:
France paid an emotional tribute on Thursday to 130 people killed 10 years ago during a rampage by Islamic State gunmen and suicide bombers targeting cafes, restaurants and the Bataclan concert hall.
The attacks were the deadliest on French soil since World War Two, scarring the national psyche and prompting emergency security measures, many of which are now embedded in law.
The assault on November 13, 2015, began with suicide bomb blasts that killed one person, bus driver Manuel Dias, outside the Stade de France sports stadium and continued with gunmen opening fire at five other locations in central Paris.
‘AN EMPTINESS THAT CANNOT BE FILLED’
“Since that November 13, there is an emptiness that cannot be filled,” Dias’ daughter Sophie said at the ceremony, her voice trembling with tears as she recalled the family’s endless phone calls through the night, trying to reach her father, before they were told he had been the attackers’ first victim.
“May we raise awareness among younger generations, pass on the values of our republic, and remind them of all those innocent lives lost, like my dad, who left far too soon, for no reason at all,” she said.
President Emmanuel Macron was among officials who paid their respects to Dias and the other victims with a minute of silence and the laying of wreaths before the Stade de France.
Throughout the day Macron, survivors and relatives of victims will honour those killed and wounded at each of the sites of the attacks.
Victims’ associations say two survivors of the attacks later committed suicide, bringing the total death toll to 132.
ATTACK ON FRANCE’S CULTURE
Historian Denis Peschanski said what made the November 13 attacks – which targeted places where people were out and about having fun – unique “was that everyone was a potential victim”.
Paris Mayor Anne Hidalgo told RTL radio: “The terrorists wanted to attack this culture that is ours — this culture of joy, celebration, diversity, sharing, and music.”
A decade on, the threat of such attacks in France has mutated.
“An attack like the one we unfortunately experienced ten years ago, on November 13, is less likely. The weakening of the Islamic State makes it much less probable,” Interior Minister Laurent Nunez told BFM TV.
“However, the threat remains high … with individuals present on national territory who radicalize very quickly and plot violent actions.”
Officials will later pay tribute to the 90 people killed at the Bataclan.
Sebastian Lascoux remembered being there 10 years ago listening to the Eagles of Death Metal rock band and how people “ended up all squashed together and collapsed as one”.
“And then (there was) the smell of blood,” said Lascoux, now aged 46. One of his friends was shot dead trying to shield another member of their party.
Lascoux still suffers from post-traumatic stress and cannot be in crowded places or enclosed spaces, even cinemas. Loud pops remind him of gunshots.
Reporting by Bertrand Boucey, Inti Landauro, Alessandro Parodi, Elissa Darwish, Antony Paone;Writing by Ingrid MelanderEditing by Richard Lough, Frances Kerry and Gareth Jones
Britain has backed the development of small modular reactors (SMR) as a way to quickly and cheaply increase energy security and meet climate targets
International News via Reuters:
Britain selected North Wales for its first small nuclear power station on Thursday, angering the United States which had wanted a large, U.S.-led plant built there as part of its greater involvement in the UK’s energy sector.
Britain has backed the development of small modular reactors (SMR) as a way to quickly and cheaply increase energy security and meet climate targets, with its pre-eminent engineering company Rolls-Royce leading the design. Large-scale nuclear power plants can take decades to build.
The decision to choose Wylfa on Anglesey, an island in North Wales that was home to an old nuclear station, for an SMR drew the ire of the U.S., which has criticised Britain’s energy strategy for inflating prices and weakening Britain.
“We are extremely disappointed by this decision, not least because there are cheaper, faster, and already-approved options to provide clean, safe energy at this same location,” U.S. ambassador Warren Stephens said in a statement.
The U.S. had been pushing for U.S. energy firm Westinghouse to lead a large-scale project in Wylfa, but Britain opted for the British-built SMR on the island in Wales, where the centre-left Labour Party is losing political support.
The government said it would consider building a new large-scale plant elsewhere and has tasked state-owned GB Energy-Nuclear with finding a suitable site by autumn 2026.
In what was an unusually strongly-worded statement, the U.S. ambassador said that would not get “shovels in the ground” quickly, or bring down British industrial electricity prices which are among some of the highest in the world.
A spokesperson for British Prime Minister Keir Starmer said Wylfa was the best site for SMRs, but Britain was still keen to work with the United States on nuclear.
“This is a sovereign capability so we want to use the best site possible for our flagship programme,” the spokesperson told reporters.
“We will work closely with our U.S. partners, they remain vital to Britain’s nuclear future… (the decision) does not close the door to a larger plant elsewhere. We are keeping options open and making sure the U.S. has a meaningful role in our plans.”
The new mini-reactors there will deliver power for the equivalent of 3 million homes, and will support up to 3,000 jobs in the local community during construction, with a plan to connect them to the grid in the 2030s.
There are two large-scale nuclear power plants currently under construction in Britain, one at Hinkley Point C in western England, and one at Sizewell C in eastern England.
Starmer has cited his close relationship with U.S. President Donald Trump as helping on a range of fronts, from securing the first deal to relieve some U.S. tariffs to working together on conflicts in Ukraine and the Middle East.
But Trump has been an outspoken critic of Britain’s energy policy and efforts to reach net zero by 2050, calling on the government to drill more oil from the North Sea and criticising the country’s windfarms.
($1 = 0.7451 pound)
Reporting by Sarah Young and Alistair Smout in London, additional reporting by Elizabeth Piper, Sam Tabahriti, Shadia Nasralla and Susanna TwidaleEditing by Peter Graff, Matthew Lewis, Kate Holton
Such a move would enable the fund to take stakes in 14 defence companies with a combined market capitalisation of about $1 trillion
International News via Reuters:
Unnerved by the Ukraine war and U.S. President Donald Trump’s whiplash statements on defending Europe, Norway could allow its $2.1 trillion sovereign wealth fund, the world’s largest, to invest in major defence companies from 2027 after a more than 20-year hiatus.
Such a move would enable the fund to take stakes in 14 defence companies with a combined market capitalisation of about $1 trillion, and which it cannot currently invest in under ethical guidelines because they make components of nuclear weapons.
On November 4, parliament voted in favour of reviewing the fund’s ethical guidelines, in place since 2004.
The companies that could become open to the fund are: Lockheed Martin, Boeing, Airbus, BAE Systems, Safran, Thales, BWX Technologies, Northrop Grumman, Fluor, General Dynamics, Huntington Ingalls Industries, Jacobs Solutions, L3Harris Technologies and L&T.
Once spurned by ESG-minded investors, defence stocks are becoming more acceptable, as Russia continues to wage war in Ukraine, and European countries hike defence spending under pressure from the Trump administration.
The new security environment has also made defence stocks a potentially lucrative investment.
“Freedom is more important than ESG,” Knut Kjaer, the fund’s founding CEO, who served between 1998 and 2007, told Reuters. “Europe has to defend itself from the aggression from Russia. Why should we not invest in weapons?”
Norway was buying arms from the very same companies it has forbidden its fund from investing in, he said.
NORWAY’S FUND HAS SET INVESTING TRENDS
Any changes to the fund’s guidelines could see other ESG-minded investors follow suit, such as when in 2016, it decided to shun companies that derive 30% of revenues from coal.
Last Friday, Norway’s finance ministry named a commission to review the guidelines and which will make recommendations in October 2026, to be voted on in parliament in June 2027.
A NEW GLOBAL SECURITY SITUATION PROMPTS A RETHINK
Like Kjaer, the government has highlighted it is already a direct customer of many of these defence companies.
“On the one hand, we consider it ethically acceptable to transfer large sums to such (defence) companies as payment, while we consider it is unethical to receive much smaller amounts as returns from the same companies,” Finance Minister Jens Stoltenberg, an ex-NATO chief, told parliament on October 24.
In the commission’s mandate, the finance ministry highlights a “dilemma”: Norway buys fighter jets from Lockheed and frigates from BAE Systems, yet 20 years ago agreed its wealth fund would not invest in them.
“Since then, both companies’ involvement in weapons production and the security policy situation have changed. Nuclear weapons are fundamental to NATO’s deterrence strategy, of which Norway is a part,” it continued.
The minority Labour government would have the backing of enough parties to support a change to the guidelines.
“We can dislike nuclear weapons but it is a part of NATO’s strategy and we are a NATO member. So it is hard to see the logic in not being able to invest,” Hans Andreas Limi, the parliamentary leader for the second-largest party, Progress, told Reuters.
The third largest party, the Conservatives, is also supportive. Its incoming leader, Ine Eriksen Soereide, proposed such a change earlier this year.
Asked whether the government already backed a change ahead of the commission’s recommendations, Deputy Finance Minister Ellen Reitan said the ministry would not comment beyond what had already been communicated in the mandate.
Not everyone agrees that a fund whose aim is to safeguard future generations of Norwegians should invest in companies that help produce weapons of mass destruction threatening the survival of humanity.
“We have … heard it is a paradox that Norway cannot invest in companies we otherwise trade with. Is it really? Is there really no big difference between buying equipment our country needs and, for example, investing in nuclear weapons?,” asked Kirsti Bergstoe, the leader of the Socialist Left party, in parliament on October 23.
DIVESTMENTS ON ETHICAL GROUNDS HAVE BEEN PAUSED
Norway, a NATO country of 5.6 million, is not part of the European Union and shares a border with Russia in the Arctic.
A former head of the fund’s ethics watchdog, the body that issues recommendations on stocks to divest from the fund, says the ethical guidelines had to change to reflect events.
“We should be able to rework the ethical guidelines to say that ‘we are in a pre-war period, or an inter-war period, and so we have to look at these weapons exclusions in another manner’,” Ola Mestad, head of the Council on Ethics from 2010-2014, told Reuters.
That means, too, that Norway must tread more carefully when it issues ethical decisions to divest from international companies because the backlash can be more damaging than before, analysts said. Last week parliament paused such divestments.
“In the new regime of more politicised markets, we must be more aware of where we can be diluted, capital controls being introduced, have our assets confiscated, or being used as part of a weaponising of financial transactions where we may have to wait 100 years for getting our return back,” said Kjaer.
Some 52.4% of the fund’s assets, or $1 trillion, is invested in the U.S. across stocks, bonds and real estate.
In September, the U.S. State Department said it was “very troubled” by the decision to divest from Caterpillar over the use of its products by Israeli authorities in Gaza and the occupied West Bank.
Reporting by Gwladys Fouche in Oslo; Editing by Alexandra Hudson
The European Commission investigation follows a series of dawn raids into the company in 2023 and after allegations of anti-competitive tactics from its U.S. rival Monster Energy
International News via Reuters:
EU antitrust regulators on Thursday opened an investigation into Austrian energy drinks maker Red Bull, saying that it may be restricting competition, in particular the energy drinks sold by its closest rival.
The European Commission investigation follows a series of dawn raids into the company in 2023 and after allegations of anti-competitive tactics from its U.S. rival Monster Energy.
The EU antitrust enforcer said it has indications that Red Bull, well known for its 250 ml energy drink, may have developed a Europe-wide strategy to restrict competition from energy drinks larger than 250 ml sold in supermarkets and petrol station shops.
It said the strategy, implemented in the Netherlands where it has market power, allegedly targeted energy drinks sold by its closest rival, but did not name the company.
“We want to see if these practices may be keeping prices high and limiting choice of energy drinks for consumers,” EU antitrust chief Teresa Ribera said in a statement.
Red Bull declined to comment.
The Commission said the alleged anti-competitive practices include granting monetary and non-monetary incentives to supermarkets and petrol station shops to stop selling rival drinks larger than 250 ml and the misuse of its market power as a category manager.
Breaches of EU antitrust rules can cost companies fines of as much as 10% of their global annual sales.
Reporting by Foo Yun Chee; Editing by Sharon Singleton
Britain’s first ever military-wide survey found that 67% of female personnel had encountered generalised sexualised behaviours
International News via Reuters:
Two-thirds of women in the British army reported experiencing sexualised behaviour in the past year, according to a survey released on Thursday, findings that the government said were “wholly unacceptable”
Britain’s first ever military-wide survey found that 67% of female personnel had encountered generalised sexualised behaviours, such as inappropriate jokes or comments, while 21% reported targeted behaviours including unwanted touching or sexual advances.
Among men, 32% reported generalised behaviours, and 6% targeted ones.
“All those who choose to serve our country must be able to do so with dignity and respect, which is why today’s survey results are wholly unacceptable,” Veterans Minister Louise Sandher-Jones said in a statement.
The Ministry of Defence said it would deploy specialist prevention teams to training bases in northern and southwest England, with plans to expand to Cyprus and a Royal Air Force base by 2026 before a wider roll out.
The programme will focus on educating recruits about consent, misogyny and harmful online influences.
According to the latest data, the British military has about 137,000 regular personnel, of whom approximately 16,300 were women, making up just under 12% of the total force.
There have been a number of high-profile cases in Britain in recent years which have exposed bullying, abuse, and the sexual harassment of young recruits.
Last month, a former army sergeant major was jailed for six months for sexually assaulting a 19-year-old soldier who later took her own life.
Thursday’s announcement also follows criticism of the Armed Forces complaints system, with the Service Complaints Ombudsman saying was not “efficient, effective or fair”.
“The results of the survey show just how much more I, and leaders at every level, need to do to stamp out behaviour which has no place in the UK Armed Forces,” said Air Chief Marshal Richard Knighton, the head of Britain’s armed forces.
Reporting by Sam Tabahriti; editing by Michael Holden
Acting DI Zoenique Williams represents island at conference in Barbados
Image supplied
Bermuda Police Service press release:
Acting Detective Inspector, Zoenique Williams, recently represented Bermuda at the Annual General Meeting of the Asset Recovery Inter-Agency Network for the Caribbean (ARIN-CARIB), held in Barbados.
The meeting brought together regional law enforcement officers, financial investigators, and legal professionals to strengthen collaboration in asset recovery and the fight against financial crime.
Acting Detective Inspector Williams delivered a detailed presentation highlighting Bermuda’s continued efforts to integrate financial investigations into traditional policing. Efforts which are not only disrupting criminal networks, but also supporting the island’s preparations for the upcoming Financial Action Task Force (FATF) Mutual Evaluation.
Her presentation outlined Bermuda’s proactive initiatives to enhance asset seizure, management, and forfeiture processes, including the ongoing development of legislative and operational frameworks to strengthen confiscation proceedings. Key discussions also focused on trends observed in criminal asset seizures and strategies to improve regional cooperation in asset recovery.
In a notable development, Bermuda was elected to the ARIN-CARIB Steering Group—an achievement that grants the island a formal leadership role in shaping the network’s regional priorities and strategic initiatives. This appointment underscores Bermuda’s strong commitment to international standards, transparency, and effective financial crime enforcement.
Acting Detective Inspector Williams’ participation and Bermuda’s new position on the Steering Group reaffirm the island’s dedication to advancing best practices in asset recovery and fostering stronger partnerships across the Caribbean region.
Corporation brings back the festive Lighting of the Town celebration after seven years
Press release:
The Corporation of St. George’s is pleased to announce the return of the “Lighting of the Town” celebration on Saturday, November 29th, 2025, from 6:30 p.m. to 9:30 p.m. at King’s Square.
After seven years, this cherished event returns to mark the official start of the Christmas season in the Town of St. George. The celebration holds special meaning as the Town commemorates its 25th anniversary as a UNESCO World Heritage Site, recognizing more than four centuries of continuous community life in the oldest English town in the New World.
Founded in 1612, the Town of St. George served as Bermuda’s first capital and remains a living reminder of the island’s early colonial history. For generations, families have gathered in King’s Square to share moments of joy and togetherness—traditions that continue to define the spirit of the Town.
“We’re thrilled to welcome the community back for this special evening,” said Mayor Quinell Francis, JP. “The Lighting of the Town has always brought families and neighbors together, and reviving it during our UNESCO anniversary year feels especially meaningful. This season reminds us of what truly matters—community, kindness, and the light we share with one another.”
The evening will feature performances by East End Primary, St. George’s Preparatory, Richard Allen AME, Ebenezer Methodist Church, and the Salvation Army. Entertainment will also include the Vibe Tribe Gombeys, DJ Mystro, PowerGirl, and the Town Crier, with blessings offered by Pastor Thomas Nisbett from St. Peter’s Church. His Excellency Mr. Andrew Murdoch, CMG, Governor of Bermuda and other dignitaries will join the Council for the official lighting ceremony, which will illuminate King’s Square and extend through Water Street, Ordnance Island, and York Street up to Somers Garden, transforming the Town into a festive Winter Wonderland.
Guests can enjoy complimentary egg nog donated by Dunkley’s. Treats from local vendors including Food Hub, Duch Pops, and Dandy Donuts, along with a bake sale hosted by the Sui Genesis Group will be on sale from the King’s Square.
“We invite everyone to join us for this magical evening,” added the Mayor. “Let’s celebrate the holidays together in the heart of Bermuda’s history and community.”
The Corporation of St. George’s extends its gratitude to UNESCO Grants, community partners, and volunteers for their support in making this event possible.
Event Details:
Date: Saturday, November 29th, 2025
Time: 6:30 p.m. – 9:30 p.m.
Location: King’s Square, St. George’s, Bermuda
Admission: Free and open to all
The case was brought by Verband Sozialer Wettbewerb, a German association against unfair competition, targeting PB Vi Goods
International News via Reuters:
The name ‘gin’ is reserved solely for alcoholic beverages, the European Court of Justice ruled on Thursday.
The case was brought by Verband Sozialer Wettbewerb, a German association against unfair competition, targeting PB Vi Goods, which sold a drink called “Virgin Gin Alkoholfrei”.
The German court handling the case referred it to the European Court of Justice for a ruling.
Under EU law, gin must be made by flavoring ethyl alcohol of agricultural origin with juniper berries and have a minimum alcohol content of 37.5%.
The court said the prohibition protects consumers from confusion and ensures fair competition among gin producers.
“The fact that the legal name ‘gin’ is accompanied by the term ‘non-alcoholic’ is irrelevant in that regard,” the court added.
PB Vi Goods did not immediately reply to an emailed request for comment.
Reporting by Charlotte Van Campenhout; Editing by Jan Harvey
Police and Customs partnership thwarts drug trafficking attempts
Press release:
The Bermuda Police Service (BPS), working alongside H.M. Customs, has in recent weeks, intercepted two major shipments of illegal narcotics. In doing so the team prevented more than $2 million worth of drugs from reaching Bermuda’s streets.
In one operation, officers at the Hamilton shipping docks seized a container concealing a large quantity of illicit substances. The discovery followed intelligence provided by the HM Customs Commercial Operations Unit, which led to a targeted inspection by dock officers, BPS Narcotics officers, and Customs inspectors. Their coordinated efforts resulted in the successful recovery and seizure of the drugs.
In a separate but related matter, Customs officers at the L.F. Wade International Airport detained a 40-year-old Bermudian man arriving with drugs valued at more than $100,000. The drugs were recovered after the subject was selected for secondary inspection.
Detective Chief Inspector Jason Smith, of the BPS Drugs Unit, praised the partnership between the two agencies: “These seizures highlight the power of inter-agency cooperation and intelligence-led policing. The collaboration between the BPS and HM Customs continues to play a vital role in tackling drug trafficking and organized crime.”
A Customs spokesperson added: “This operation reflects the continued vigilance and professionalism of our officers in protecting Bermuda’s borders. By working together and sharing intelligence, we are preventing dangerous drugs from entering our community and keeping Bermuda safe.”
Both agencies reaffirm their commitment to strengthening joint operations, enhancing surveillance, and bringing those responsible for drug importation to justice. Investigations into both incidents remain ongoing.
But the deep political divisions that caused the 43-day shutdown in the first place remain unresolved
International News via Reuters:
The U.S. government is due to lumber back to life on Thursday after the longest shutdown in U.S. history snarled air traffic, cut food assistance to low-income Americans and forced more than 1 million workers to go unpaid for more than a month.
But the deep political divisions that caused the 43-day shutdown in the first place remain unresolved.
The funding package contains few guardrails to restrain Republican President Donald Trump from withholding spending, in an administration that has regularly challenged Congress’ constitutional authority over money. And it does not address the soon-to-expire health subsidies that led Senate Democrats to begin the shutdown in the first place.
The shutdown also exposed divides within the Democratic Party between its liberal base, which has demanded its leaders do whatever necessary to rein in Trump, and moderates who feel their options are limited so long as Republicans hold majorities in both chambers of Congress. Senate Democratic Leader Chuck Schumer is facing calls to step down, even though he voted against the deal.
AMERICANS BLAME REPUBLICANS AND DEMOCRATS ALMOST EQUALLY
Neither party appears to have emerged as a clear winner. A Reuters/Ipsos poll released on Wednesday found that 50% of Americans blamed Republicans for the shutdown while 47% blamed Democrats.
The return to normality could be short-lived, as the deal only funds the government until January 30, raising the prospect of another shutdown early next year.
The shutdown put Democrats in an unusual position, as Republicans have more frequently been the side that forced funding expirations over the last few decades.
This shutdown also stood out for what was largely absent: debate over the $38 trillion national debt, which Congress for now leaves on a path to keep growing by about $1.8 trillion per year.
Senate Democrats said the pain across the economy, including interruptions in federal benefits and missed paychecks for federal workers, was worth it to call attention to the coming surge in health insurance prices for some 24 million Americans.
“The healthcare of the American people is a fight worth having, and I’m proud that Democrats held together for this long to fight this battle,” Representative Hank Johnson of Georgia told Reuters. “The American people are more aware of the high stakes in the fight that we’re on … They understand the precariousness of the situation, and that’s why they want us to fight.”
Democrats secured no guarantees on health subsidies, only a promise that the Republican-controlled Senate will hold a vote on the matter, with no assurances that it would pass or that the House would even vote on it.
But they argued that they managed to elevate the issue at a time when polls show Americans are concerned about the rising cost of living, and Republicans could face political blowback if they do not act to prevent insurance costs from spiking. The subsidies disproportionately benefit residents of Republican-controlled states.
Republicans, meanwhile, found themselves making arguments often voiced by Democrats during shutdowns: that the damage of the disruptions was not worth it.
“We ought to be legally prohibited from ever shutting down the government,” Representative Brian Fitzpatrick, a Republican moderate, told Reuters. “This is just absolutely insane, insane that we’re now using government shutdowns as leverage for policy. That can never happen, and it’s a terrible precedent to set, obviously.”
FLIGHTS AND FOOD BENEFITS TO RESUME
The nation’s air travel system has begun returning to normal, after thousands of flight cancellations brought on by high absentee rates among the nation’s air traffic controllers.
And 42 million Americans will no longer have to worry whether the SNAP subsidies that help them pay for groceries will run out. A USDA spokesperson said most states would receive funds for full SNAP benefits within 24 hours of the government reopening.
The shutdown forced hundreds of thousands of federal employees to keep working without pay, while others deemed nonessential were ordered not to work. They are due back pay under a 2019 law, though Trump’s White House has threatened to withhold pay for some.
Trump also tried to fire thousands of federal workers during the shutdown as he followed through on a threat to target domestic programs favored by Democrats.
The deal that ends the shutdown allows those workers to keep their jobs, and pauses Trump’s broader downsizing campaign until the end of January. Trump is on track to reduce the 2.2 million-strong civil service by 300,000 workers by the end of the year.
The shutdown has prevented the government from releasing an array of economic data, forcing investors and the Federal Reserve to operate in the dark as they tried to assess the state of the world’s largest economy.
It also spooked consumers ahead of the year-end holiday shopping season. The nonpartisan Congressional Budget Office estimated it would delay roughly $50 billion in spending and lower U.S. GDP by 1.5 percentage points. The CBO said the economy will largely bounce back when the shutdown ends, though up to $14 billion in lost activity will not be recovered.
Reporting by Andy Sullivan, David Morgan, Bo Erickson and Nolan D. McCaskill; Additional reporting by Leah Douglas; Editing by Scott Malone and Edmund Klamann
U.S. officials are working on a raft of initiatives to ease the regulatory burden on U.S. banks
International News via Reuters:
Financial markets are underpricing geopolitical risks and nearly all euro zone banks are exposed to some extent, so weakening regulation now could jeopardize the sector’s viability in the longer run, ECB supervisory chief Claudia Buch said on Thursday.
U.S. officials are working on a raft of initiatives to ease the regulatory burden on U.S. banks, including softening capital rules, a pullback on supervisory bank exams and a friendlier stance on bank mergers.
Buch, however, pushed back on these ideas, arguing that capital requirements do not come at the expense of profitability and banks must be prepared for difficult-to-predict scenarios, especially as governments’ ability to respond via spending is limited.
“Broad-based resilience does not come at the expense of long-term profitability,” Buch said in a speech.
The key issue is that current market valuations may not be accurately reflecting risk, so there is potential for a sudden repricing, and higher capital levels will then better protect banks.
“Traditional correlations linking macroeconomic shocks and credit risk may no longer hold,” Buch said. “All of this indicates that markets are underpricing geopolitical risks.”
In case of systemic shocks, like the pandemic or surging energy costs after Russia’s invasion of Ukraine, governments often act in concert with central banks to mitigate risks.
However, debt levels are already high so it is not obvious authorities would be able to provide similar support in future crises, Buch added.
There are also no signs of widespread losses or credit supply constraints from banks being capital-constrained, so maintaining sufficient capital buffer requirements remains important.
The ECB will play its part by streamlining key supervisory activities and by assessing the effectiveness of its work.
But none of these changes should lead to laxer regulation, Buch argued.
“We do not need new regulatory frameworks, but we do need a commitment from legislators not to weaken the frameworks we have,” Buch added.
Reporting by Balazs Koranyi; Editing buy Toby Chopra
