New research from KPMG International is urging banks and retailers to form strategic partnerships—or risk falling behind—as businesses attempt to keep up with the rapid pace of change in the payments space.

The report, Partnering for payment modernization by KPMG International, includes responses from 500 banks and 500 retailers to assess their progress on payment modernization. It identifies that while costs are high and modern technology continues to disrupt; a better ecosystem of partnerships between banks, retailers, technology providers and regulators can help improve operations and enhance the payments experience for customers.

The survey reveals that 54 percent of retailers believe that payment modernization is crucial to the future of their business, including delivering major efficiency and operational gains. However, just over half (53 percent) of retailers believe that their banks understand their payment modernization goals, with 45 percent saying their banks are proactively delivering payment solutions tailored to their needs. With the average retailer planning to increase modernization budgets by 2.5 percent over the next year, there is scope for more cohesion and development in the area. Banks don’t disagree, with 51 percent believing that the future winners in payments will be those with the best ecosystems. 60 percent of banks also indicate an increase in spending this year, with 21 percent reporting expected increases of five to nine percent over their existing budgets.

Furthermore, it was found that common goals across both sectors include the replacement of legacy payment infrastructure, enhancing fraud prevention and meeting customer expectations. High implementation costs and budget constraints were noted as the top barrier for those starting out on their payment journey (66 percent in banking and 69 percent in retail), while 62 percent in the banking sector also noted outdated legacy infrastructure and technical debt as a major frustration. As they mature their payments modernization capabilities, each sector highlighted meeting customer demand as the main concern (41 percent of banking leaders and 35 percent of retail leaders).

Isabelle Allen, Global Head of Consumer, Retail and Leisure at KPMG International, said: “The quest by consumers for ever faster, lower friction and more secure payment options is relentless and fueling innovation and disruption. Banks and retailers cannot afford to work in isolation or indulge in traditional vendor-customer relationships. The future of payments will likely be defined by a broader ecosystem which extends beyond banks and retailers, to include technology providers, regulators, fintech startups and consumers themselves. Success should be measured by the way companies access new technologies, reduce costs, share expertise, fill skill gaps, accelerate time to market, and mitigate risks.”

Investing in the future of payments

The importance of modernizing payment systems is reflected in the level of capital now being channeled into these programs. The data indicates that banks spent an average of US$96.9 million on payment modernization over the past fiscal year, demonstrating the magnitude of the transformation underway across the industry. Full-service and corporate banks lead the investment charge, allocating US$151.1 million and US$146.7 million, respectively.

On the retail side, hypermarkets and warehouse clubs report the highest levels of investment due to their high-volume, low-margin models, which rely on fast, efficient checkout processes. Online retailers also invest heavily to support their digital business models. At the same time, more traditional segments (such as department and specialty stores) invest less, likely reflecting limited budgets and customer preferences. Some of the biggest increases over the next year will be invested by those seeking to catch up; department and discount stores will boost spending by over three percent, while supermarkets are targeting increases of nearly four percent.

Modern technology is a key disruptorThe report highlights the length to which modern technology, mainly AI and digital currencies, are disrupting payments systems and processes. It states that in three years, the lion’s share of banks will be using AI-enabled biometrics to secure payments and agentic AI to process transactions autonomously. AI is also expected to catapult fraud detection to new levels, with 85 percent of banks saying they will turn to AI for instant risk resolution. Seventy-eight percent of respondents also noted the use of behavioral and contextual data to create personalized services, and 71 percent noted that extracting insights from payment data for pricing and liquidity decisions will be the top AI uses that will grow the fastest over the next three years.

In addition, 60 percent of banks are currently upgrading core systems to support programmable money and digital ledgers, with 76 percent looking to do this over the next three years. The banking industry will also focus much of their attention on using Central Bank Digital Currencies (CBDCs) for atomic settlement for SMEs, alongside efforts to establish stablecoin and token fintech platforms.

Harnessing regulatory shifts

Rather than viewing compliance as a cost or constraint, the report finds that leading retailers are harnessing regulatory shifts to advance their growth strategies. Seventy-nine percent of the leaders (versus 37 percent of those just beginning their modernization journey) say they collaborate with regulatory bodies to help shape effective regulations that foster innovation. Leaders are also highly focused on implementing a range of payments regulations. They are particularly ahead of beginners in anti-fraud regulations and those for new payment types, such as digital wallets and BNPL (Buy Now, Pay Later). The data also suggests they are making more progress meeting international standards such as ISO 20022.

Geoff Rush, Global Head of Banking and Capital Markets at KPMG International, said: “With the rise of digital currencies, it is increasingly clear that the future of payments lies in dynamic and value-driven ecosystems and partnerships — banks, fintechs, retailers and tech companies, for example — where banks play a key orchestration role in providing a variety of services on top of advanced technology and modern payment infrastructure. Such alliances amongst these sectors should be encouraged by shared goals around operational efficiency, fraud prevention and regulatory compliance. The big question is, who will be the first to tie up some of these strategic partnerships and really differentiate themselves?”

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A light economic calendar means traders are likely to feed off the ongoing narratives around AI, Iran, tariffs, and earnings. From the earnings perspective, today brings data from Home Depot and Workday in particular. In a week that undoubtedly has the software and tech space in the limelight, it can be easy to miss out on the fact that we also see a handful of interesting high-street names such as Home Depot, TJX, and Lowe’s report between today and tomorrow.

This provides a key insight into the health of the consumer at a time of employment and AI uncertainty. Coming off the back of yet another shift in the tariff rates, we will be watching for any commentary over whether the new 15% blanket rate helps or hinders the margins at Home Depot. On the software-front, any hope that Workday will enjoy a sharp rebound off the back of strong earnings should perhaps be tempered. However, it does provide a timely opportunity for the CEO to lay out exactly why this current selloff is ill-founded. One thing is for sure, investors will be looking for signs that the business plans to leverage the new technology rather than wait for it to consume them.

Looking ahead, much of this week will be dominated by the question of whether we will see the US launch an attack on Iran, with their military in positioned to a great expense. The notion that this is simply a case of playing the strongest hand possible to force Iran into a highly one-sided deal could yet play out as the truth. After-all, we have seen Trump use that trick over and over when it comes to trade.

However, in an environment where Trump wants to control particular spheres of influence, the fact that Iran has had such a profound anti-American and volatile influence on much of the Middle East would undoubtedly provide an incentive to seek real change. Would the US move those military assets without speaking to Iran at the same time to avoid a pre-emptive attack? Are the negotiations simply a smokescreen aimed at affording them enough time to plan and position accordingly? One thing is for sure. The commodity space in particular is positioned around the likeliness of an attack, with the likes of gold and oil expected to see significant gains should Trump opt to launch military operations in the second-biggest country in the Middle East.

The post Gold and Oil Prices Swing On Escalating Iran Tensions appeared first on European Business & Finance Magazine.

Brett Schklar is a technology expert known for helping organisations move beyond AI hype and focus on measurable business value. As CEO of AI-First Leadership and author of AI Without the BS, he works with senior leaders to build practical frameworks that turn experimentation into execution. His approach centres on governance, culture and return on AI rather than surface-level adoption.

As a technology speaker addressing global audiences, Brett challenges the assumption that deploying generative AI guarantees competitive advantage. Instead, he urges businesses to scrutinise pilots, empower employees from the ground up and treat AI literacy as a strategic priority. His work focuses on sustainable transformation, incremental performance gains and leadership accountability.

In this exclusive interview with the London Keynote Speakers Agency, Brett discusses the myths that continue to shape AI decision-making, the structural changes organisations must put in place to drive growth and why confidence, not fear, will determine who achieves a genuine return on AI.

Where Are Leaders Most Often Misjudging Risk and Return on AI?

Brett Schklar: “There are a lot of AI myths that I talk about in the speeches, but one of the most important points is not actually a myth, it is a fact, that 95% of all new generative AI pilots fail. That is not a myth.

“There are other myths. AI is going to take us over. AI is replacing humans. There is some truth and some fiction to that.

“But the most important myth that needs to be overcome is that deploying AI is an automatic formula for success, and that if you are not doing it, you are missing out.

“Companies that are looking at technologies, evaluating them, and looking for that return on AI before they jump in will help reduce that 95% of AI initiatives that are failing.”

What Practical Strategies Should Organisations Adopt to Drive Growth Through AI?

Brett Schklar: “There are a couple of practical AI strategies for business growth that I help companies put together and organise. One is that this transformation needs to happen top down and bottom up at the same time.

“Employees need to feel empowered and autonomous to explore new technologies and capabilities that will help them in their role. At the same time, leadership, the CEOs and business leaders, need to give employees the freedom to look at innovation and technologies that can really help.

“This is not about getting 40% gains overnight or 50% gains overnight. It is about allowing every employee to get 1% better. Those small, incremental gains will continue to add up.

“The second big thing we must have in place as a strategy for leveraging AI for business growth is to build either a centre of excellence or a steering committee within the company, made up of cross-organisational functions and people who are most passionate about what AI can do for the business.”

How Is AI Reshaping Workplace Innovation in Practice?

Brett Schklar: “AI is doing a lot to drive workplace innovation. It is the essence of workplace innovation, but it is doing it in a way that is different from what we expect.

“A lot of companies think AI is going to create huge gains in a very short amount of time, 20% gains, 30% gains, more efficiency, better targeting, more growth.

“The reality is that AI helps drive businesses forward by empowering each employee to look at what AI can do in their job to get them 1%, 2% or 3% better.

“These small gains across an entire organisation are better than a large initiative forced from the top down, which can get stalled, slowed down and face resistance.”

What Core Message Do You Want Audiences to Take Away?

Brett Schklar: “My hope is that when people are in my sessions or in my keynote, they take away a couple of things.

“First, it is possible to overcome the fear of AI that has been ingrained in our brains since the early 1920s through Hollywood and the broader fear of AI. We can overcome that.

“Second, as employees build more confidence and comfort in these generative AI tools, the AI IQ, or AIQ, elevates across the organisation.

“If you remove the fear of AI and empower employees to ramp up their AIQ, then you are headed towards a really good formula for a return on AI.”

This exclusive interview with Brett Schklar was conducted by Tabish Ali of the Motivational Speakers Agency.

The post Brett Schklar: Why 95% of AI Pilots Fail — and How to Fix It appeared first on European Business & Finance Magazine.

Investors are wary as they brace for further volatility sparked by unpredictable US trade policy and the fallout from AI advances. London’s FTSE 100 is on the back foot in early trade, with more pessimism seeping through following sharp falls on Wall Street.

Nevertheless, the blue‑chip index is still showing resilience, particularly compared to indices stateside, helped by solid corporate results. Chemicals giant Croda and medical supplies firm ConvaTec surprised on the upside and also showed optimism about the outlook. Utility companies are also proving a draw for investors in the uncertain climate.

Jitters over the impact of new artificial‑intelligence‑powered tools on some incumbents are spreading, with the cyber‑security industry now reeling from the effects. Developments released by Anthropic have been like a wrecking ball through realms of listed companies, with Claude Code Security still wreaking havoc on cyber firms.

CrowdStrike shares fell sharply for a second session, bringing others down with it, amid worries the new tool can easily replicate some of its services. The wider economic impact is also a fear factor, given the potential for deep job losses, and labour markets have already been weakening. While this would ordinarily help lift hopes for faster interest rate cuts, sticky inflation won’t make that course of action quite so easy.

Focus is turning to President Trump’s State of the Union address tonight for clues about future US trade policy. Investors are bracing for another twist in the tariff tale. The blanket 10% global duties have come into force, but the threat of upping these to 15% is still dangling.

Plus, the President and his team appear to be looking at other options in the trade arsenal, including considering imposing new tariffs under the pretext of national security on industrial sectors such as large batteries, chemicals, power grids and telecoms equipment. The President won’t want to lose face against trade opponents, which is why relying on the TACO trade, and the expectation he’ll ‘chicken out’, bears risks.

The State of the Union address could also see Trump justify the military build‑up in the Gulf and potentially a fresh attack on Iran. Oil prices are hovering near seven‑month highs as tense negotiations are set to resume on Thursday, with the threat of military action still high. The concern is that it would not just disrupt shipments from Iran, but oil supplies across the region.

Another niggle of worry which risks turning into a bigger headache is unwelcome developments in the private credit market. Blue Owl Capital, a major player in private credit, changed the withdrawal mechanism for one of its funds, prompting a share slide amid concerns there could be deeper problems in the market, to which large institutions like pension funds are exposed.

It comes after the collapse of First Brands and Tricolor, a car‑financing company. Blue Owl has brushed off concerns, saying it is returning capital to investors more rapidly under the new agreement. In this more anxious environment, any hint of a problem is sending investors scuttling for cover, and checking for sufficient diversification and high‑quality exposure is sensible.

The post FTSE 100 Dips as AI Shock and Tariff Fears Rattle Markets appeared first on European Business & Finance Magazine.

SINGAPORE – Media OutReach Newswire – 24 February 2026 – In the wake of Budget 2026 and Prime Minister Lawrence Wong’s announcement of a National AI Council to accelerate mission-driven artificial intelligence deployment, EtonHouse International Education Group has collaborated with OpenAI to roll out ChatGPT Edu across its global education network, establishing a secure, enterprise-grade AI workspace designed to strengthen governance, operational excellence and institutional capability.

The implementation spans the Group’s schools and education brands, including EBridge Pre-School, an Anchor Operator, extending AI integration beyond classroom experimentation into enterprise-wide infrastructure supporting operations, marketing and admissions, finance, human resources, school administration and technology development.

While education was not named among the initial priority sectors identified under Singapore’s national AI strategy, EtonHouse views schools as foundational to building long-term AI capability and literacy across society.

Governance-led AI deployment

The rollout has been structured around enterprise governance principles. Access is managed through role-based access controls, single sign-on authentication and automated provisioning, ensuring that AI tools and information remain aligned to defined job responsibilities and permission boundaries.

ChatGPT Edu operates within a centrally managed internal workspace governed by consistent policies across the Group. External sharing and third-party integrations are enabled only where explicitly approved and aligned with business requirements, reinforcing a secure and compliant AI environment.

This governance-first approach reflects a deliberate shift from isolated experimentation to structured, scalable adoption.

From classroom innovation to enterprise infrastructure

EtonHouse previously developed Lumina, its proprietary AI-powered lesson planning platform. The deployment of ChatGPT Edu represents the next phase of integration, extending advanced artificial intelligence capabilities into enterprise functions.

Within the secure workspace, teams can upload documents for structured analysis, generate comparative reports, conduct scenario modelling and retrieve institutional knowledge more efficiently. Technology teams are also leveraging Codex, OpenAI’s agentic coding tool, to enhance development workflows, supporting code drafting, review and testing while maintaining human oversight and established engineering standards.

The Group is concurrently developing internal AI assistants and structured workflows within defined governance parameters to streamline routine processes and standardise how knowledge is accessed and applied across departments.

Augmentation, not replacement

EtonHouse emphasises that artificial intelligence is being implemented as an augmentation layer rather than a substitute for professional judgement.

“Artificial intelligence is not a shortcut or a replacement technology. It is a learning infrastructure,” said Mr Ng Yi-Xian, Group CEO of EtonHouse International Education Group. “We are developing tools that help students learn more confidently, support teachers to plan and differentiate more effectively, and equip HQ teams to serve schools faster and with higher quality. AI should amplify good practice, not replace it, so we are building the governance and capability to deploy it responsibly at scale.”

The rollout will be supported by structured staff training alongside OpenAI experts clear usage guidelines and ongoing oversight to ensure transparency, responsible usage and alignment with internal policies and regulatory obligations.

“As Singapore advances its national AI ambitions, many institutions are working to bridge the gap between rapidly advancing AI technologies and their ability to deploy them effectively and responsibly. EtonHouse’s rollout of ChatGPT Edu shows how forward-thinking education organisations can translate AI into practical, trusted enterprise-wide systems that empower teams today, while building confidence for the long-term.” added Oliver Jay, Managing Director, International at OpenAI.

Education’s role in Singapore’s AI future

Budget 2026 outlined the formation of a National AI Council to guide coordinated deployment across priority sectors including advanced manufacturing, connectivity, finance and healthcare.

EtonHouse’s implementation reflects how education institutions can apply similar principles of governance, security and enterprise readiness, positioning schools not only as adopters of technology but as contributors to Singapore’s broader AI capability building.

With this move, EtonHouse signals a transition from exploratory AI usage to secure, scalable integration across its global network, reinforcing its commitment to innovation anchored in institutional discipline and responsible deployment.

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The issuer is solely responsible for the content of this announcement.

About EtonHouse International Education Group

Founded in 1995 in Singapore, EtonHouse has grown into a global education group with more than 100 schools across eight countries. The Group offers a highly recognised international education pathway from infant care to high school, including the International Baccalaureate, Cambridge, and the Reggio Emilia-inspired approach, all designed to nurture inquiry, creativity, and intercultural understanding. Beyond schools, EtonHouse is deeply committed to community impact through teacher training, philanthropy, and purpose-driven educational initiatives.

Its commitment to excellence has earned the Group numerous accolades, including:

• E-Bridge successfully earned multiple accolades for teaching excellence and innovation from the ECDA Awards for Excellence in Early Childhood Development from 2019-2024.
• E-Bridge Pre-School Bukit Panjang clinched the “Outstanding Centre for Teaching and Learning Award” in 2019.
• E-Bridge educators were commended with “Outstanding Early Childhood Teacher Award” in 2021.
• Clinched “Promising Infant Educator Award & Early Childhood Innovation Award” in 2022.
• E-Bridge Pre-School SengKang Square won the “Outstanding Centre for Teaching and Learning Award” in 2023.
• Clinched the “Outstanding Centre for Teaching and Learning Award” for E-Bridge Pre-School Sengkang Square and “Outstanding Early Intervention Professional” in 2024.
• EtonHouse International School Suzhou, an IB K-12 school, garnered recognition as one of China’s top international schools, according to a research firm based in Washington, DC.
• In 2023, EtonHouse China won the ‘Forbes China Best International Education Group Award.’
• In 2024, EtonHouse received the esteemed HoneyKids Singapore Education Awards, achieving Gold for “Best Bilingual Programme”, Silver for “Best Small School in Singapore” and clinched both Gold and Silver for “Principal of the Year (Kindergarten).
• In 2025, EtonHouse launched two news campuses in Saudi Arabia, EtonHouse International Pre-School Granada and EtonHouse International School Granada while achieving 6 HoneyKids Singapore Education Awards in Singapore.

At EtonHouse, collaboration with governments is a cornerstone of its mission. The partnerships include:

• Participation in Singapore’s Anchor Operator (AOP) Scheme, launching E-Bridge Pre-School in 2014 to deliver top-notch infant care and pre-school education for children aged 2 months to 6 years across a network of 31 centres.
• The expansion of EtonHouse’s presence in Suzhou and Nanjing, China came at the invitation of the Jiangsu provincial government, reinforcing its commitment to global education.
• Won an Economic Development Board tender in 2017 and introduced Middleton International School, offering an affordable schooling option for expatriate families.

In 2015, the EtonHouse Community Fund (ECF) was established, dedicated to enhancing the lives of underserved children and youth through education.

The Eton Academy was launched in 2020, providing English, Maths, and Science academic programmes for Nursery 1 to Primary 6 in centres across the island. Building on this success, The Eton Academy expanded in 2025 with the introduction of Elevate After School Care, offering primary school children a holistic, well-rounded after-school experience that complements their academic development.

EtonHouse International Education Group remains unwavering in its commitment to shaping futures and making a meaningful impact on the world through education.

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Quick Answer: Life insurance has become the engine powering private capital’s expansion into credit markets. Firms like Apollo, Blackstone, and KKR use policyholder premiums to fund lending operations, profiting from the spread between what they earn on investments and what they owe policyholders. But as newcomers pay increasingly aggressive prices to enter the market — exemplified by Aquarian Capital’s $4.1 billion acquisition of Brighthouse Financial — regulators and industry veterans are warning that the model’s risks are growing faster than its safeguards.

The trade that built modern private capital is deceptively simple. Buy a life insurer. Take control of the investment portfolio backing its policyholder obligations. Redirect that capital into higher-yielding private credit — direct loans, structured finance, asset-backed securities — and pocket the difference between what the investments return and what the insurance liabilities cost. The policyholder gets their annuity or pension payment. The asset manager keeps the spread.

Apollo Global Management pioneered this model when it merged with its insurance arm Athene in 2022, creating what has since become the template for an entire industry. Athene provides Apollo with permanent capital — roughly $300 billion in assets that do not need to be fundraised, do not face redemption windows, and do not depend on investor sentiment. Instead, they flow in steadily as Americans buy annuities, roll over pensions, and plan for retirement. Apollo’s asset management division then deploys that capital into the private credit opportunities it originates, creating a closed loop: insurance funds lending, lending generates returns, returns service insurance obligations, and the spread is profit.

The model has been extraordinarily successful. Apollo’s assets under management have grown to nearly $1 trillion. Its retirement services division, powered by Athene, accounted for a significant share of the firm’s earnings in 2025. Competitors noticed. Blackstone acquired a majority stake in Everlake (formerly Allstate Life Insurance) and built its own insurance-backed lending platform. KKR acquired Global Atlantic for $12 billion. Brookfield took over American National Insurance. Ares, Carlyle, and a growing list of mid-tier firms followed, each seeking the same prize: a captive pool of long-duration capital that could be invested in illiquid, higher-yielding assets without the constraints of traditional fund structures.

Life insurance has become, in effect, the lifeblood of the private capital industry — the source of cheap, stable funding that makes the economics of private credit work at scale.

The Aquarian Question

The Brighthouse Financial deal crystallised the anxiety that has been building across the industry for months. Aquarian Capital, a New York-based holding company backed by Abu Dhabi’s Mubadala sovereign wealth fund and RedBird Capital Partners, agreed in November 2025 to acquire Brighthouse for $4.1 billion — roughly $70 per share in an all-cash transaction. Brighthouse, spun off from MetLife in 2017, carries more than $230 billion in promises to policyholders and other liabilities. It had reported net losses, struggled with stagnating annuity sales, and was widely considered a complex and troubled asset.

Apollo and Carlyle had both examined the deal and walked away. Other asset managers who independently valued Brighthouse came up with figures roughly half what Aquarian paid. One senior executive who reviewed Aquarian’s investor presentation described the reaction as unanimous horror. Aquarian’s thesis was essentially to take the Apollo playbook and accelerate it — use Brighthouse’s enormous liability base to fuel a lending and investment operation, profiting from the spread at a scale that justified the premium.

Brighthouse shareholders approved the merger in February 2026. Regulatory approvals are pending. The deal is expected to close later this year.

The concern is not that the model itself is flawed. Apollo has operated it profitably for years, with $34 billion in regulatory capital at Athene and a track record of matching assets to liabilities. The concern is what happens when the model is replicated by firms with less experience, thinner capital buffers, and greater appetite for risk — firms arriving late to the insurance-backed credit trade and paying increasingly aggressive prices to get in.

The Systemic Question

The Bank for International Settlements published research estimating that publicly traded North American life insurers would face a capital shortfall of approximately $150 billion if their portfolios were marked to market under stress conditions. The finding underscored a structural issue: private credit assets held by insurers are inherently harder to value, less liquid, and more opaque than the government bonds and investment-grade corporate debt that life insurers traditionally held.

Regulators have responded, though slowly. The National Association of Insurance Commissioners introduced new rules in 2026 increasing capital charges for certain categories of private credit held by affiliated insurers. State regulators in New York and Virginia have raised concerns about the more permissive capital treatment offered by Iowa, where several private equity-affiliated insurers are domiciled. And the question of related-party investments — where insurers invest in assets originated by their own parent companies — remains deeply contentious. Athene holds roughly 12% to 18% of its assets in related-party investments, depending on how the calculation is performed. Some competitors hold significantly more: KKR’s Global Atlantic at 22%, Brookfield’s American National at 30%, Blackstone’s Everlake at 35%.

UBS chairman Colm Kelleher has publicly warned of a looming systemic risk in the insurance sector. Apollo CEO Marc Rowan dismissed the claim, arguing that most private credit held by insurers is investment grade and that the hysteria around the asset class is disconnected from the substance. Both men are talking their book. The truth is likely somewhere between them — and the answer depends entirely on what the next credit cycle looks like.

The Stress Test

The insurance-backed credit model does not have a built-in expiry date, but it has a vulnerability that functions like one: if credit losses spike, if interest rates move sharply, or if regulators tighten capital requirements beyond what current portfolios can absorb, the spread that makes the entire model profitable could compress or vanish. And unlike a hedge fund, an insurer cannot simply gate redemptions. It has obligations to policyholders — contractual, regulated, and in many cases guaranteed by state insurance funds.

The executives watching Aquarian’s Brighthouse deal are not worried because one firm overpaid for one insurer. They are worried because the pattern — latecomers paying premium prices for complex insurance liabilities, planning to invest aggressively to cover the cost — is the kind of behaviour that historically precedes a correction.

The private capital industry has built an extraordinary machine. Insurance provides the fuel. Private credit provides the engine. The spread provides the profit. But machines built for calm conditions are tested by turbulence. And the people closest to this one are starting to say, quietly but clearly, that they are nervous — and that they are right to be.

The post Why Private Capital’s Insurance Addiction Is Starting to Crack appeared first on European Business & Finance Magazine.

QUICK ANSWER What’s happening? European manufacturers are lobbying to preserve the EU’s Carbon Border Adjustment Mechanism (CBAM) after the European Commission proposed giving itself “discretionary powers” to suspend parts of the carbon tariff regime. Why it matters: For the first time, heavy industry is fighting to save a climate law, warning that proposed “kill switch” powers threaten €100 billion in decarbonization investments. What’s next: The industry revolt exposes fundamental tensions between climate ambition and regulatory flexibility as CBAM enters its critical implementation phase.

In an extraordinary reversal of traditional business-Brussels dynamics, European heavy industry is mounting a fierce campaign to protect the EU’s Carbon Border Adjustment Mechanism (CBAM) from being weakened by the very institution that created it. Manufacturers from fertilizers to cement are warning against introducing a kill switch into the just-launched CBAM scheme, as the European Commission seeks discretionary powers to suspend parts of the new measure.

The revolt rstarted earlier this year represents a pivotal moment in European climate policy, where industrial lobbying has shifted from opposing environmental regulations to defending them against regulatory uncertainty.

The “Kill Switch” Controversy

The EU executive wants to grant itself the power to exempt goods from the just-launched carbon border adjustment mechanism (CBAM), which requires importers of certain products to pay for planet-warming pollution emitted during the production process. Industry leaders describe this proposed flexibility as a “kill switch” that could undermine the entire framework.

The timing is particularly contentious. CBAM successfully entered into force on January 1, 2026, following a coordinated deployment across all EU Member States, integrating seamlessly with National Customs Import Systems. After three years of transitional reporting, companies finally face financial obligations under the system.

From 2026, EU importers need to buy and surrender CBAM certificates corresponding to the CO2 emissions embedded in their exports, priced in line with the EU’s carbon market, at around €70-€100 per tonne of CO2. This price mechanism creates genuine competitive pressure for cleaner production methods, which industry now wants to preserve.

Why Industry Wants Climate Rules Protected

The industrial defense of CBAM reflects a sophisticated understanding of competitive dynamics in global markets. European manufacturers have invested billions in decarbonization technologies based on CBAM’s promise of level playing field protection. The proposed exemption powers threaten this investment thesis.

Manufacturers worry the European Commission is undermining the bloc’s new carbon tariff regime, a key pillar of EU climate policy, warning the move is throwing investment plans into disarray and threatening much-needed decarbonization projects.

The industrial logic is clear: if CBAM can be suspended at political discretion, the regulatory certainty needed for long-term capital allocation disappears. This creates what economists call “regulatory risk premium” – the additional return demanded by investors to compensate for policy uncertainty.

Scope and Scale of CBAM’s Impact

CBAM initially applies to imports of certain goods whose production is carbon-intensive and at most significant risk of carbon leakage: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. These sectors represent some of Europe’s most strategically important industrial capacity.

More than 12,000 economic operators submitted applications for CBAM authorization until January 7, 2026, with over 4,100 successfully obtaining authorized declarant status. In the mechanism’s first week alone, 10,483 Import Customs Declarations with CBAM goods were validated automatically, covering 1.66 million tonnes of goods.

The scale demonstrates CBAM’s immediate operational significance for European supply chain management and industrial competitiveness.

Investment Implications and Market Response

Industry’s defense of CBAM reflects deeper concerns about European competitiveness. The carbon border adjustment was designed to address “carbon leakage” – the relocation of production to countries with weaker climate policies. Without robust enforcement, European manufacturers fear renewed competitive disadvantages.

Countries like Brazil and Turkey have introduced domestic carbon-pricing policies in response to CBAM’s signals, while the United Kingdom is implementing its own Carbon Border Adjustment Mechanism starting in 2027. This global momentum toward carbon pricing validates the industrial argument that CBAM creates positive competitive dynamics.

The proposed exemption powers could undermine this momentum by signaling that EU climate policy lacks credible commitment. Financial markets price political risk into long-term investments, making regulatory consistency essential for industrial transformation.

Global Trade and Diplomatic Pressures

The “kill switch” proposal emerges amid intense international pressure on CBAM. The United States has pressured the bloc to withdraw the law, saying it will create massive trade barriers among transatlantic partners, while China, India, Russia, and South Africa have voiced opposition, calling it protectionism.

These diplomatic pressures likely influenced the Commission’s desire for flexibility mechanisms. However, industry argues that discretionary exemption powers would create worse outcomes than consistent enforcement, even amid trade tensions.

The industrial position reflects sophisticated game theory: credible commitment to CBAM enforcement encourages global decarbonization, while exemption possibilities incentivize continued lobbying against the mechanism.

Strategic Implications for European Business

The industry revolt over CBAM’s potential weakening signals a fundamental shift in European business-government relations around climate policy. Rather than reflexively opposing environmental regulations, leading industrial voices now recognize that consistent policy frameworks create competitive advantages over regulatory uncertainty.

This evolution reflects the maturation of European climate policy from cost burden to strategic asset. Companies that have invested in decarbonization now depend on policy consistency to realize returns on those investments.

Around €1.5 billion in CBAM revenues are expected by 2028, according to the Commission, creating substantial fiscal stakes alongside industrial interests. The proposed Temporary Decarbonisation Fund demonstrates how CBAM revenues could support further industrial transformation.

Looking Forward: Policy Credibility and Investment Confidence

The outcome of this industry-Commission standoff will determine CBAM’s credibility as a long-term policy framework. Industry’s unprecedented defense of climate regulation reflects genuine concerns about investment security in an uncertain global trade environment.

For European businesses navigating 2026’s economic landscape, CBAM’s integrity matters beyond climate considerations. The mechanism represents a test of EU institutional capacity to maintain consistent policy frameworks despite external pressures.

The resolution will likely influence broader debates about European industrial strategy and the role of regulatory certainty in maintaining competitive advantages. As global trade tensions intensify, European industry’s demand for policy consistency offers valuable insights into business priorities beyond immediate cost considerations.

The unprecedented spectacle of heavy industry lobbying to preserve climate regulation demonstrates how policy certainty has become as valuable as policy content in driving long-term business strategy.

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The European Commission announced its RESourceEU Action Plan in December, 2025, committing €3.5 billion in funding to critical raw material (CRM) projects. By Anna Dodd.

Citing risky dependencies on China, the European Commission aims to have Europe and its allies gaining control over CRM projects across the supply chain. China has long dominated the CRM pipeline – from extraction to processing to manufacturing of final products – which poses a risk to Europe’s energy transition goals. But, the Asian superpower has also shined in military security — a salient subject in recent years.

The past year saw China restrict exports on a range of critical minerals and rare earths — first in April 2025, and then again in October 2025. Although these restrictions were mainly implemented in response to United States tariffs under President Donald Trump, the impacts of Chinese restrictions were felt globally, including within the European Union. 

“[China’s] stronghold creates dependencies for the EU and other partners that are increasingly weaponised for geopolitical purposes,” reads a European Commission communication.

From raw materials to critical raw materials

There was a time when these resources were simply that — resources. When did raw materials like copper, rare earths, and magnesium gain the qualifier of “critical”? 

Henry Sanderson, a journalist and author specializing in clean energy and critical minerals, credited Trump as a major player in the global focus towards critical raw materials, dating back to 2017. 

Although the EU released its first raw materials list in 2011, “Trump really catalyzed this focus on critical minerals in his first administration,” said Sanderson, while in conversation with European Business Magazine. The author pointed to a 2017 executive order which called on the US Department of Commerce to develop a critical minerals federal strategy. 

“But it didn’t receive the global attention that it probably should have done at the time.”

Having campaigned under an anti-renewables stance, Trump’s focus on these materials rather stems from his long-held opposition to American reliance on foreign imports, according to Sanderson. But China’s retaliatory measures on U.S. tariffs last year is what has brought renewed attention to this subject more recently.

“I think that highlights some of the weaknesses of [western] democracies — they wait for issues to bubble up till they reach crisis mode, and then they take action,” he said. “But certainly for Trump, since his first time around, he’s been focused on critical minerals.” 

A renewed view on European security

According to the Commission, critical raw materials are essential for a number of geopolitical priorities: clean energy, digital transitions, food security, and defense and aerospace.

A legal expert specializing in corporate energy and mining regulation noted that the narrative surrounding critical raw materials has transformed in recent years.

“Rearmement and massive investments in defense will likely spillover into critical minerals,” said the expert, choosing to remain anonymous for privacy reasons. 

“Much of the infrastructure that is needed for defense, like drones, AI systems, radar and missile guidance — it’s quite metals-intensive and power hungry … If Europe is really serious about rearming and reinforcing its strategic autonomy, it cannot do so while remaining reliant on Chinese electric vehicle batteries and rare earth magnets.” 

But before EU security and military returned to mainstream geopolitical discussions, critical raw materials had already been identified as strategic for the green energy transition. 

The expert observed this change: “What concerns me professionally is that the energy transition is not fueling this trend anymore. Yes, rare earth and battery metals are kind of like the new oil, but resource control itself is the new bargaining power,” he said.

“The question is whether democracies can build secure, ethical, and competitive supply chains fast enough and without resorting to the same extractive zero-sum game they claim to oppose.”

The European stake 

Where countries like the United States and China have been in the critical raw materials business for some time now, the European Union has been late to join. China has been particularly active in Africa, not only taking a leading role in critical raw materials mining, but also investing substantially in various infrastructure projects through its Belt and Road Initiative (BRI). 

Eszter Szedlacsek is a climate policy expert with Vrije Universiteit Amsterdam and research fellow with the Africa Policy Research Institute. She highlighted that comparing China’s influence in Africa to the European Union’s is difficult. 

Under the European Union’s Critical Raw Materials Act (CRMA), several bilateral partnerships in Africa are outlined. “But these are quite opaque,” said Szedlacsek. “So their success and whatever impact they have and however they can compete with the Chinese influence really depends on how they will be implemented.” 

And although the strategic projects in Africa outlined in the CRMA are much more concrete, they are minimal in comparison to China. “Four projects in the entire African continent, it’s not too extensive,” said Szedlacsek, adding, however, that the EU brings its own unique value.

“How the EU tries to differentiate itself is through local value addition, supporting industrialization locally in African countries,” she said.

Similarly, Arthur Leichthammer, a policy fellow for geoeconomics at the Jacques Delors Centre, added that price is not the only consideration when it comes to competition with China. “They’re not competing on price,” he said. “You will not compete on price.” 

Other factors come into play, such as ensuring a safe and reliable trading partner. 

“There are resilience criteria that must be priced in,” said Leichthammer. “If you would assume a frictionless trade, you would just keep on buying from China … you will not be able to rely on China for continuous supply.” 

Cooperating with the United States

In spite of Trump’s recent rhetoric surrounding Greenland and the possibility of a U.S. acquisition – which was met with widespread European opposition – the American government indicated a more collaborative attitude at its February 4, 2026 Critical Minerals Ministerial, seemingly reframing the country’s approach to international relations — at least on the subject of critical raw materials. 

“Today the United States, together with our partners and allies, has set out to reshape the global market for critical minerals and rare earths,” reads the government communication. 

Echoing similar statements from the RESourceEU Action Plan, the U.S. government announced collaboration with over 50 countries, as well as the European Commission. 

“The [critical minerals and rare earths market] is highly concentrated, leaving it a tool of political coercion and supply chain disruption, putting our core interests at risk. We will build new sources of supply, foster secure and reliable transport and logistics networks, and transform the global market into one that is secure, diversified, and resilient, end-to-end.” 

In a joint press statement, the nature of the collaboration between the European Commission and the United States is explained in further detail. Within the next 30 days, a Memorandum of Understanding “aimed at boosting critical minerals supply chain security” will be signed between the two parties.  

What this collaboration means for critical raw materials development in Greenland, demonopolizing China’s role within the market, and the EU’s RESourceEU Action Plan has yet to be seen. 

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