Author: itsupport

Background noise to boardroom threat

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Given the war in Ukraine and ongoing tensions in the Middle East, it is only natural to assume that businesses globally have prioritised geopolitical and energy risks. But there appears to be a longer-term risk category that corporates appear both unprepared for and that may present equal – if not greater – challenges than even environmental concerns: so-called ‘societal risks.’

In the latest Global Risks report released in January from the World Economic Forum (WEF), a leading think-tank, societal risks account for a third of the total list of current risks outlined as being the most serious by leading companies and key stakeholders (eight out of 33), four of the top 10 short-term risks, and two of the top-term long-term risks. They include inequality, the erosion of human rights and/or civic freedoms, involuntary migration/displacement, and ‘societal polarisation,’ where splits in society occur over widening gaps in income, opportunity, and political and cultural views. Together, these developments could have a serious impact on the global economy and world stability, say the report authors.

In fact, societal risk has become such a concern that it is ranked third in the WEF’s two-year outlook, only dropping to ninth place when respondents look 10 years ahead. Furthermore, it is the only risk that has remained in the top 10 list of risks for both the short-term and long-term outlook for the past five years, while inequality has been cited by leaders of the world’s largest companies as the most interconnected global risk for the past two years (higher even than environmental risks). With aspects such as mis/disinformation and geoeconomic confrontation also being heavily interconnected, societal and political polarisation could deepen further in the next two years, says the report.

Devastating impacts
If companies think these risks are unlikely to manifest themselves, they are badly mistaken: they already have – and with devastating impacts in some cases. Perhaps the most significant example is Brexit. The UK’s decision to leave the European Union (EU) in 2016 caught many off-guard despite years of polarised political debate about the merits of being a member of the bloc. Those voters who wished to remain part of the EU frequently cite an orchestrated, well-planned xenophobic disinformation campaign that successfully exploited social media as a key decider for the referendum result. And the impact is ongoing. The UK’s exit from the EU has seen a decline in the number of casual workers from lower-income EU countries in central and eastern Europe working in sectors such as farming and hospitality, which has been difficult for companies in these industries who are struggling to fill these positions with local labour. Brexit has also seen many workers with key skills across the public and private sectors leave the country due to changes in immigration and visa rules. Furthermore, highly charged public opinions around immigration and nationalism remain.

Societal risks should not be considered ‘peripheral’ any longer

Corporates have also suffered fallout from societal risks – most notably in sudden shifts in public sentiment that have led to disruptive consumer boycotts or workforce activism. For example, in 2023 brewer Anheuser-Busch InBev suffered a fierce boycott after its marketing campaign for Bud Light, featuring transgender influencer Dylan Mulvaney, riled conservatives over the brand’s overt LGBTQ+ support in a Superbowl ad. Sales plummeted by 17 percent in just two weeks and the brand’s two-decade dominance as the US’ most commercial beer also went up in flames. The company’s response – which included distancing itself from Mulvaney – then led to a boycott from the LGBTQ+ community. Even now, Bud Light’s sales have not fully recovered.

Due to their prominence and their capability to inflict long-lasting damage, experts say societal risks should not be considered ‘peripheral’ any longer – they are strategic risks. But there are many reasons why companies fail to recognise their potential importance, scale and impact. One is because companies instinctively place them lower down the pecking order compared to more ‘direct’ risks like competition or cost pressure. Another reason is that societal risks are inherently difficult to identify and quantify: they encompass a wide range of risks, which means companies’ responses also vary widely.

According to Paulo Cardoso do Amaral, MBA Professor at Portugal’s Católica Lisbon School of Business and Economics, societal risks often give off “weak signals,” such as subtle shifts in public sentiment, emerging social narratives, or early-stage policy debates, but then build up – and get out of hand – quickly. “What begins as a marginal conversation can escalate into a global movement within days,” he says. Traditionally, these signals used to evolve slowly enough to be captured through periodic analysis, but that assumption “no longer holds,” he says, “since the speed of communication amplified by digital platforms compresses the lifecycle of societal change.”

Non-traditional frameworks
Companies also undervalue societal risks because they do not fit neatly into typical risk categories. Traditional enterprise risk frameworks are designed around financial, operational and insurable risks – not inequality, migration or polarisation. And unlike market or credit risks, societal risks lack clear metrics, probabilities, and time horizons, which makes them difficult for organisations to quantify in the same way as more traditional and financial risks.

“Companies still tend to under-appreciate societal risks because they are easier to discuss in narrative terms than to govern operationally,” says Ryoji Morii, CEO of Insynergy, a Japan-based consulting firm. “These risks are often treated as ‘macro background conditions,’ even though they can directly affect workforce stability, customer trust, regulatory exposure, supply continuity, local legitimacy, and the resilience of operating assumptions.”

To address the problem, says Morii, companies need to ask themselves deeper questions to determine the wider consequences around how particular societal risks could alter their labour/recruitment market, license to operate, customer behaviour, legal exposure, political environment, or the reliability of their partners and operating regions.

Societal risk management also requires effective use of scenario planning to improve business continuity and make corporate strategy and operations more resilient. A simple scenario is in the area of talent management: when large groups of people feel excluded from the labour market, companies face a catastrophic talent shortage and rising operational costs due to social instability. Additionally, income disparity often prevents skilled individuals from accessing the training they need to fill modern roles. For companies, this means longer recruitment cycles and a skills gap that halts innovation.

Naima Robenhagen Burgdorf, global head of strategic workforce planning at Ramboll, an engineering, architecture and consultancy firm, has seen the problem present itself in the form of recruitment strategies, the use of contractors and off-shoring. “I have seen firsthand how companies become blindsided – not by the macro event itself, but by the workforce implications they never modelled,” she says. “A shift in geopolitical regional stability doesn’t show up as a workforce risk until you are suddenly re-evaluating where your offshore centres sit. A technology shift like AI doesn’t register as a societal risk until your early career pipeline model is structurally wrong,” she adds.

Supply chains are another key area where societal risks can linger. For instance, says Soledad Mills, senior vice president at sustainability consultancy TDi Sustainability, societal polarisation and income disparity concentrate vulnerable workforces in specific geographies, making certain countries disproportionately exposed to labour exploitation (including child/forced/slave labour), which can be a significant hidden risk factor in agricultural, garment, auto and electronics supply chains.

Meanwhile, involuntary migration creates a constantly shifting, undocumented labour pool that increases the likelihood of forced labour entering supply chains undetected. As a result, “companies relying on tier two, three or ‘nth’ suppliers in high-risk jurisdictions often have near-zero visibility into actual working conditions,” she says – a risky prospect given the current emphasis on third-party risk liability.

Enhanced due diligence
Another issue for companies is that key jurisdictions are beginning to require more due diligence and meaningful reporting around non-financial risks and the impacts companies’ operations can have on wider society.

Companies face direct liability for any harm caused by their actions

For example, the EU wants companies to consider societal risks and their impacts more directly. The EU Corporate Sustainability Reporting Directive (CSRD), which came into force in 2023 and took effect in 2025, applies to all large EU companies, but has extra-territorial impact due to the fact it also applies to non-EU companies that conduct significant business within the EU. Consequently, estimates suggest the directive covers around 50,000 companies worldwide.

A key requirement of the directive is that it mandates ‘double materiality,’ which means companies need to examine and report on the impact of the company’s operations on the environment and society, as well as report on the impact of sustainability factors on the company. Arif Gasilov, partner, climate and environmental reporting at sustainability consultancy Gasilov Group, believes “the double materiality assessment is probably the closest thing to a systematic tool for surfacing societal risks at the corporate level.”

He adds that the requirement to evaluate both how societal conditions affect the business and how the business affects societal conditions “creates a two-way map of exposure that traditional frameworks miss,” adding that “companies that actually go through this usually find societal risks that were previously invisible or buried under ‘reputational risk’ as a catchall.”

Mills adds that there is increased investor risk if companies neglect human rights due diligence and warns that “regulatory exposure is hardening, particularly in Europe” because companies face direct liability for any harm caused by their actions. Furthermore, she says, “companies with unmanaged human rights exposure face sudden devaluation when abuses surface,” while lenders and institutional investors are increasingly required under their own frameworks (such as the UN Principles for Responsible Investment and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct) to assess human rights due diligence quality in portfolio companies. “Inadequate due diligence isn’t just a compliance risk,” says Mills, “it is a signal of weak governance and poor operational visibility overall.”

Why Ireland rules Europe’s ETF market

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Ireland is the firmly established engine room of Europe’s exchange-traded funds market, reveals new research from EY Ireland. The company’s EMEIA ETF Leader, Lisa Kealy, says the country has 70 percent of all European Exchange Traded Funds (ETFs), and that it is seeing much growth in active ETFs, of which it has a 94 percent share. That’s quite a success story considering that the value of European domiciled ETFs surged to €2.7trn, growing by 41 percent in 2025 alone.

“It didn’t happen by accident: It was due to hard work to present ourselves as a centre of excellence,” Kealy remarks. Blackrock, Vanguard, State Street – the top three institutional investors – chose to set up in Ireland because the infrastructure is highly developed to support their products. The country has also developed a role for itself that goes far beyond being a popular fund domicile.

“Because they set up here, everyone else followed, and now Ireland is seen as the centre of excellence for ETFs,” she explains. The Undertakings for Collective Investment in Transferable Securities (UCITS) framework, and Ireland’s understanding of the nuances of ETFs, redemptions, and how ETFs trade on the secondary market, have all been factors that have helped. Trust with passive ETFs has facilitated interest in active ETFs too.

Positive growth driver
On a global scale, ETFs have also been a positive growth driver – pushed along by increasing transparency, liquidity, cost-efficiency and accessibility. Kealy says UCITS has been an important building block to Ireland’s success. It is an EU regulatory standard that harmonises the regulation of investments funds, allowing them to be managed and sold across Europe with a single passport. It focuses on investor protection by enforcing strict diversification, liquidity, and transparency rules for retail investment products.

Irish service providers have built seamless connectivity to the ETF ecosystem

Comparing the experience of Luxembourg with Ireland, she explains: “The UCITS brand and regulatory framework really opened the door for us when it came to ETFs. It wasn’t going to guarantee leadership, but it did open the door. While Luxembourg had a great opportunity, scale didn’t come automatically. What differentiated us in Ireland and gave us leadership was the ability to really scale – establishing ourselves as a centre of expertise, by really understanding daily transparency, in-kind creations and redemptions, the listing structure, the settlement structure, and how ETFs are actually traded on the second trip.

“It is about how you can create and redeem blocks of capital with authorised participants (APs), or market makers (MMs), that whole creation subscription structure. We needed to really understand it all and to make sure that they traded really well on the secondary market. We understood that ETF mechanics and the regulation. And it was that investment of, you know, knowledge, technology, people and process that created our centre of excellence in Ireland.”

Disproportionate share of ETFs
Deborah Fuhr, CFA Fellow, Managing Partner and Founder of ETFGI, says her firm’s data shows that Ireland captured a disproportionate share of ETF launches and assets. She thinks Ireland also benefits from its operational efficiencies when it comes to fund administration, depository, legal, tax, and capital markets expertise – and compared to European centres it has a predictability of regulation, and it benefits from being an English-speaking country. More to the point, she says once Ireland became the default ETF domicile, its ability to scale reinforced itself.

“UCITS was the enabler; Ireland’s execution made it decisive,” she claims. As for Ireland’s key differentiators, she cites ETF-specific regulatory interpretation, faster authorisation timelines, and she finds that the country is comfortable with complex synthetic, fixed income and active structures. Subsequently a majority of European active ETF assets are domiciled in Ireland, and she says that is despite active ETFs still being a minority of total ETF assets.

However, Ireland’s regulators were early and pragmatic on non-transparent and semi-transparent models, and while there has to be a certain degree of portfolio disclosure flexibility, “Ireland already hosted the largest concentration of fixed income ETFs, which translated naturally into active adoption,” she notes.

With US active ETF sponsors expanding into Europe, and defaulting to Ireland, she believes this signals that Europe’s next phase of ETF growth is active, fixed income, and outcome orientated. As for Ireland’s portfolio disclosure flexibility, which is particularly relevant to daily disclosures, Kealy interjects: “The Central Bank of Ireland has recalibrated the daily transparency requirements for active ETFs to balance investor protection, market efficiency and intellectual property. Transparency works well for passive ETFs because the managers are holding a very broad index. That can create issues for active strategies because it risks institutional investors front running that fund, if it makes sense, because the whole portfolio is disclosed.” Its regulatory approach is helped by engaging closely with industry.

Complexity: Leaping the moat
Ciarán Fitzpatrick, Global Head of ETF Product at JPMorgan, adds that fund administration, capital markets expertise and specialist talent are critical to sustaining Ireland’s leadership. In fact, he describes them as the moat. “Ireland’s model is not simply a legal domicile; it is a scaled operating platform and infrastructure,” he explains before commenting that Irish Funds have stressed the “breadth and depth of service capability and the highly automated and scalable global solutions” available to issuers there.

The country’s ecosystem has also evolved beyond asset servicing into broader front-office expertise spanning capital markets including APs located in Ireland, product development, innovation and global distribution. “This matters more – not less – as the industry shifts toward active ETFs, outcome-oriented strategies, derivatives overlays and new operating models such as tokenisation,” Fitzpatrick suggests.

Fuhr adds: “Evidence shows that ETF success correlates strongly with primary/secondary market efficiency, and Ireland specialist ETF administrators, AP-facing capital markets desks, lawyers, tax experts and index specialists.” The moat is being created by ETFs becoming more complex, by adding operational depth and not just regulation.

APs: Full liquidity support
Fitzpatrick says the role of APs and MMs is vital, helping to provide full liquidity support to the ETF ecosystem, while also “underpinning the creation and redemption mechanism that connects the secondary market (where investors trade) to the primary market (where ETF shares are created or redeemed).”
Market Makers also support two-way pricing, absorb and manage intraday flows. “As ETF usage becomes more retail and more mainstream, this connectivity becomes more visible – and more sensitive,” Fitzpatrick explains before highlighting that “Irish service providers have built seamless connectivity to the ETF ecosystem, including APs and MMs.”

He adds: “When the operating model evolves, regulators naturally focus on who provides liquidity, how it is monitored and managed, and how contingency plans are governed. This is a regulatory priority to ensure that investors are being serviced transparently and that markets supporting them are functioning efficiently.”

His colleague, Fearghal Woods, Ireland Securities Services Head at JPMorgan, describes the way active ETFs are challenging traditional transparency and disclosure requirements: “Active ETFs put pressure on the classic ETF norm of frequent portfolio disclosure. Managers want the benefits of the ETF wrapper, and they also want to protect intellectual property and reduce the risk of front-running. Ireland’s central bank has been very responsive in this regard and has introduced a flexible portfolio transparency regime for both active and passive ETFs, allowing portfolio holdings to be disclosed up to quarterly, with a lag of up to 30 business days to avoid any concerns of front-running.”

The response of the Central Bank of Ireland has been to permit ETF share classes within mutual funds, he reveals, letting firms deliver ETF features through existing structures without a separate legal vehicle. “However, this may and can present some operational challenges for the fund that any issuer needs to consider carefully,” Woods reports before commenting: “For issuers it does demonstrate a desire to support active product innovation while keeping the regulatory regime coherent and scalable.”

Heightened scrutiny
Not everything is rosy. Ireland’s dominance also brings heightened scrutiny. While ETFs now represent a significant share of Ireland’s funds industry, with industry reports suggesting that they account for roughly 32 percent of total Irish‑authorised fund assets, there are structural shifts that are re-shaping demand. Therefore, younger investors, digital platforms, neobanks and robo-advisers are accelerating ETF adoption across Europe – leading to significant growth in active ETFs.

Ireland’s ability to support innovation – while maintaining regulatory credibility – will be critical to sustaining its leadership position over the next few years, particularly as assets are forecast to exceed €5trn in Europe by 2030. To achieve this, Ireland is going to need to continue to innovate. So with the young banking through the likes of Revolut, and offered ETF products through it, access to ETFs should increase.

While apps need to play a role in attracting the young, there is also a need for financial literacy to complement the Savings Investment Union, and to promote ETFs as low-cost, liquid products that are highly accessible to investors. Kealy thinks this could create a good saving habit for young people who tend to engage through apps and use automated forms rather than go to an investment adviser.

“ETFs enable access through the apps and the digital platforms that investors are looking to access, so I think it is really important in terms of our culture at a European level,” she comments. The trouble is that Europeans are good savers, but not necessarily good investors. The challenge is therefore to change the culture from a savers’ one to an investors’ culture for young people in Europe. To Kealy, ETFs are the ideal vehicle for achieving this transformation.

Risks remain
Recent reviews by the Central Bank of Ireland highlight that while the Irish ETF ecosystem has functioned effectively during both normal and stressed market conditions, risks remain. In particular, the concentration of activity among a relatively small number of APs and MMs raises questions about liquidity resilience, governance, and contingency planning. The regulator has also emphasised the need for stronger oversight, board‑level reporting, and more robust monitoring frameworks to ensure that ETF liquidity mechanisms remain robust as the market scales.

Europeans are good savers, but not necessarily good investors

Ireland can nevertheless maintain its dominance if it can avoid being complacent – taking what has been achieved for granted. The world is competitive, and so Ireland can’t afford to sit on its laurels. As Kealy says, Luxembourg is fighting hard to create a really strong ETF ecosystem.

She concludes: “So we need to work harder to continue to earn our position each and every year. This means we need to continue to develop Ireland’s ETF market infrastructure, and to collaborate with the leaders and the managers in the US and the UK to ensure that we have the best ecosystem and that we are really innovative and quick in responding to their needs.”

Work to be done
In Kealy’s view there is still work to be done. For example, there is a need to fix the disconnection around domestic participation, and the domestic block – the tax issue to create an investment culture in Ireland by implementing a favourable tax regime for investors. “You do this by ensuring there is no tax block on Irish people investing in our ETF industry,” she explains.

An opportunity to continue to lead the transformation of the market, encouraging more investors than savers, begins on July 1, 2026, when Ireland takes on the EU presidency. It will allow Ireland to create more harmonisation and standardisation, as well as more digital infrastructure around ETFs – enabling Ireland to promote a smart approach to leading in this area.

Woods also says maintaining Ireland’s leadership is about scaling the operating model by continuing to invest in automation and talent, enhancing the regulatory framework, and enabling innovation without undermining confidence. A key part of this will be to expand ETF and new product capabilities while enhancing investor protection with ongoing regulatory pragmatism. Fuhr summarises it by saying that “Ireland’s lead is structural, not accidental – but leadership must be continuously earned.”

Debt diplomacy 2.0: Who owns emerging markets?

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For decades, the success story behind emerging markets was simple: borrow, build, grow. Debt was a stepping stone, never entirely stable, but still a way to develop and grow. Today, that story holds no value. In the current landscape, debt is not just a tool for development; it silently redefines the boundaries of control.

Call it ‘debt diplomacy 2.0.’ The pathways to achieve growth have evolved, the instruments are more advanced, and the effects are perhaps more profound, but not that obvious. Emerging economies once operated within a relatively predictable system. The key players were known and outcomes were often foreseeable. When international lenders stepped in, Western financial institutions restructured debt, while governments accepted austerity in exchange for stability. It was disorganised, but still somewhat planned.

Today, the market is fragmented, and debt is spread across a network of state-owned lenders, bond markets, private funds and bilateral deals. Not a single state has complete control. And that is precisely the real challenge. The ‘bright shining’ strategy of modern development is infrastructure financing. Across Asia, Africa and Latin America, governments have borrowed heavily to finance power plants, highways and ports. On paper, these development schemes show growth and progress. However, in practice, they often get lost in heavy paperwork or in the dynamics of geopolitics. This shift reflects a broader change in how influence is exercised. Where debts once revolved around interests and returns, it is now linked to foreign policies and strategic relationships. When repayment becomes difficult, which often happens, negotiations extend beyond balance sheets.

Taking advantage
Historically, control was gained through wars and battlefields. Today, there are far more calculated approaches. Rather than directly taking over small economies, it is more beneficial to take advantage of their financial situation: holding power to influence decisions, limiting opportunities, or dictating terms that are suitable only to them. And hence, options are further reduced. Over the last decade, developing economies have welcomed international bond markets. Borrowing in dollars required less effort due to global liquidity, higher interest rates and weak currencies. However, that environment has now shifted. Financial resources are becoming more limited, and as a result, debt servicing costs are crossing new highs every year. The outcome of this situation is a gradual squeeze.

Governments are trying their best to avoid default by adjusting their annual budgets and making space for repayments. Public investment slows and social spending becomes increasingly limited. Individually, none of this reaches the news, but collectively, it is reshaping priorities in a significant way.

So, who really owns emerging markets? The answer is not straightforward. China has shown immense growth and Western economies have a long history of influence. Yet the reality is more complex. Everyone seems to have a stake, and at the same time, no one has sole control. Power is fragmented. A country seeking debt relief may struggle to meet the demands of bondholders in New York, the deadlines of multilateral organisations in Washington, and the expectations of bilateral lenders in Beijing. Coordination fails due to long delays, and because of that, economic momentum stalls.

Limited capabilities
The core issue lies in the absence of a system capable of handling this complexity of modern debt. Current debt processes were not built for this level of fragmentation. While G20’s Common Framework is a positive initiative, they remain insufficient in addressing the structural gaps. The burden, meanwhile, falls on borrowers whose capabilities are already limited. Some economies are becoming more cautious, avoiding large-scale debts, forming strategic partnerships carefully, and scrutinising hidden costs. Others continue to invest, hoping that growth will surpass liabilities. In a world where capital is expensive and external shocks are frequent, that is a dangerous bet.

The key issue isn’t just financial; it is strategic. Emerging markets are being pushed to operate in a system where capital often comes with hidden conditions. The real challenge is not to avoid debt altogether, but to negotiate terms that ensure long-term autonomy. In ‘debt diplomacy 2.0,’ control is rarely explicit.

Markets are controlled through agreements, refinancing conditions, and limited options. To move forward, emerging markets will need to diversify their creditors, organise obligations more effectively, and draw a clearer line between economic necessity and political independence. That may well define the next decade: not whether countries can grow, but whether they can do so on their own terms.

The rise of the data state

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For the last several years, data was considered mainly an administrative tool. Governments treated digitalisation only as a way to improve efficiency by decreasing bureaucracy, boosting access and streamlining services. This approach is now shifting, with nations increasingly treating digital infrastructure as economic and strategic assets. From Singapore’s integrated digital identity platforms to Estonia’s decentralised databases, governments are designing new models of national data ecosystems. Instead of only regulating the data, they are extracting key insights from it, while controlling and designing the digital infrastructure. These insights are helping support secure data exchange, financial verification, urban planning and AI-driven systems, generating measurable economic value. However, this raises key questions around data ownership, value and monetisation. As governments take greater control of national infrastructure and citizen data, who really benefits? And could data-driven platforms become a new class of economic asset?

From digital systems to economic assets
Rising digital sovereignty is swiftly reshaping how countries view, build and use economic infrastructure. Today, national platforms are integrated systems underpinning vital financial services, while enabling greater economic access and data exchange through public-private data ecosystems. Estonia’s decentralised, open-source data exchange layer, X-Road, is the foundation of its e-state, allowing online tax filing, residence registration and health records. By connecting 99 percent of government databases, independent systems can exchange information directly, while maintaining their own data.

This supports Estonia’s ‘once-only’ principle, where data is only entered once, decreasing duplication and streamlining commercial and administrative processes. Data can be exchanged across different countries through the X-Road Trust Federation, highlighting the platform’s potential to scale internationally.

Similarly, Singapore’s MyInfo allows citizens to securely share and manage verified personal data with both private sector and government digital services. It is used by over 1,000 private and government digital services and has greatly streamlined banking and loan applications. The UAE’s Digital UAE platform and initiatives like United Digital Platform and UAE Pass offer a centralised access point and digital identity for more than 12,000 private and government services. It enables digital signatures, biometric-based identity systems and paperless transactions, like business licensing and visa applications for seamless cross-sector interaction. These platforms are evolving beyond individual administrative tools to form the foundational systems through which economic activity is carried out by embedding digital identity into core national operations.

Where the value comes from
State platforms have significantly advanced digitalisation; however, the biggest value comes from decreased economic friction. By enabling faster verification and more efficient data reuse, they are transforming large-scale transactions. “The real asset is not the citizen data itself, but the velocity of transactions that are derived from the usage of that data,” Kuldeep Kundal, founder and CEO of Cyber Infrastructure (CIS), highlighted. “When governments create a digital foundation for their infrastructure, it essentially reduces the cost of doing business – and therefore creates a huge macro-economic multiplier effect.”

Estonia’s X-Road offers value by reusing verified data across ecosystems. This allows administrative burden and costs to be considerably reduced, while accelerating service delivery through direct data exchanges between organisations like police, healthcare and tax authorities. X-Road saved both the government and citizens over 1,345 years of working time annually or two percent of its GDP in time and resources in 2018. Singapore’s MyInfo has decreased credit processing and identity verification times, which greatly slashes compliance expenses for companies. It also accelerates financial services onboarding and increases client acquisition and access to finance. Digital UAE helps businesses and entrepreneurs to operate more smoothly in the country by simplifying services like property transactions and licensing.

Another important way these platforms generate value is by ensuring that all traffic is signed, time-stamped and encrypted, to protect confidentiality and integrity. This significantly reduces the chances of fraud while avoiding expensive audit procedures. Organisations can also scale more sustainably through these systems, by adding services gradually, lowering the risks of costly implementation failures. Similarly, they support AI-enabled tools, analytics and predictive systems for sectors like urban planning.

As such, rather than directly monetising data, these platforms enable economy-wide efficiency improvements, which translates into millions of transactions carried out faster, cheaper and more transparently. These efficiency gains then act as economic leverage, which can directly boost national productivity.

Who gains the most value
Although these digital platforms have significant advantages, their value is unevenly distributed across stakeholders. “Governments gain efficiency and visibility. The private sector gains lower onboarding costs and better rails for service delivery. Citizens gain convenience, speed, and in some cases stronger inclusion,” Michelle Li, chief operating officer at Bisblox, said. “Historically, governments captured the first wave of value through modernisation. Now the centre of gravity is shifting toward ecosystems, where the biggest upside comes from what others can build on top.”

As the primary designers and controllers of these infrastructures, governments remain at the core. By using national platforms as the foundation for financial verification, service delivery and digital transactions, governments retain considerable power over how data is accessed, reused and shared throughout the economy. This boosts significant indirect value through GDP savings, higher public service efficiency and a stronger tax base.

Private sector players capture much of the direct commercial value, as they can build services on these platforms using verified, reliable data, which decreases compliance costs. “By providing the pipelines for many new products (fintech, logistics, insurance, etc) that previously were blocked by red tape, these platforms will now provide the private sector with a means of accessing markets in ways that no longer inhibit them from being able to operate within those markets,” Kundal noted. However, this also means greater reliance on government-controlled platforms, as companies do not own or control the infrastructure they use. Citizens provide the vast majority of the data for these platforms and enjoy enhanced convenience and access through less paperwork, faster services and greater financial inclusion. Despite this, they are almost never monetarily compensated, with control and consent over this personal data remaining murky areas. This creates a complex value distribution model, as most efficiency gains are tempered by a loss of autonomy and control. As these platforms deliver more economic value, they are reshaping how power is distributed within digital economies.

As national digital systems scale, economic and efficiency improvements also have some key trade-offs. One of these is privacy versus economic value creation. While enabling seamless data exchange, faster verification and lower costs, sensitive data is highly concentrated within a few government-controlled systems too.

This raises the potential for state scrutiny and surveillance, leading to an important question: When does monetisation and efficiency creation become overreach? “Regulators are pushing for citizens to have rights over their data as it flows downstream. That pressure is important because the legal structure supporting the majority of these platforms is much weaker than most governments would like to admit,” Marcus Denning, senior lawyer at MK Law, explained. “The largest risk is that most governments are attempting to define rights to the data without actually having the authority to convey those rights. Most citizens have no idea this is happening.”

This data concentration within a few platforms can worsen systemic risk and magnify losses in cases of cyber attacks, technical failures or governance issues. Similarly, while allowing thousands of private sector companies to access personal citizen data can speed up service delivery, client retention and onboarding, the risk of commercial misuse can increase too. This includes data selling, credit profiling and targeted advertising.

“Governance is still treated as a layer on top, while the data itself is moving in real time underneath. This leads to consent, access control, and auditability failing to keep up with how fast the ecosystem expands,” Pratik Mistry, EVP of Technology Consulting at Radixweb, said.

“The real risk here is not just privacy in isolation, but that once these systems scale, it becomes very difficult to trace who is using what data and for what purpose.” Another growing tension is between control and innovation. National systems can enhance efficiency and greatly decrease friction for businesses, but also limit economic activity into narrower, predetermined functions. As a result, business experimentation could be slower and restricted to the edges of the ecosystem. As state powers grow through digitalisation, individual rights also come more into focus. In many cases, it may not always be possible to inform citizens when their data moves between organisations, resulting in eroded trust in the government. This raises another fundamental question: could open and distributed systems be a fairer and more transparent way than centralised platforms to maintain efficiency and trust?

A new asset class?
The rapid growth of national digital platforms has led to them being seen more as financial than administrative assets, mainly due to their ability to underpin core economic services at scale (see Fig 1). This is similar to other regulated infrastructure assets such as payment systems and telecom networks, where the main value comes from the reliability and mass volume of the transactions they support.

Down the line, this could potentially pave the way for them generating stable and long-term economic returns, much like other traditional infrastructure assets. If so, they could attract investments from institutional investors, sovereign wealth funds and private capital alike, as digital state capacities grow. However, platform pricing is likely to remain complicated, as their performance is closely linked to trust, governance and political continuity. As a result, a new type of hybrid asset class could emerge, which would be a combination of economic asset and public utility, redefining economic value and control in modern economies.

Financing Europe’s race for energy sovereignty

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The signing of the Hamburg Declaration in January 2026 was intended to be a steady, decades-long roadmap toward transforming the North Sea into a 100 GW offshore wind hub. However, history rarely follows a linear path. The sudden and violent closure of the Strait of Hormuz shortly after the declaration has acted as a brutal catalyst, shifting the project from a long-term climate goal to an immediate matter of national survival.

As governments fast-track auctions and private capital scrambles to keep pace, the financial world is facing a stark reality: the current regulatory and financial architecture is being stress-tested by a ‘war-time’ deployment pace it was never designed to handle. For years, the North Sea wind expansion was discussed in the sterile lexicon of ‘Net Zero 2050.’ The Hormuz crisis changed the conversation overnight. Energy security has now surpassed decarbonisation as the primary driver of infrastructure investment. Arif Gasilov, partner at ESG and sustainability consulting firm Gasilov Group, captures the urgency: “The financing architecture we are examining is not a 2050 planning exercise. Governments are fast-tracking auctions now, and private capital needs to follow at a pace the current regulatory patchwork simply isn’t designed for.”

François Le Scornet, President and Senior Consultant at Carbonexit Consulting, argues that the crisis confirms offshore wind is no longer just a “light-hearted climate story” but a core industrial security plan. “Imported fossil fuels are a strategic weakness from a European perspective,” Le Scornet explains. “North Sea electricity is definitely a strategic asset from a geopolitical standpoint.”

The acceleration is visible in the numbers. Germany announced an additional 12 GW of auction volumes in direct response to the supply shock, while the UK brought forward its AR8 offshore auction to July 2026. This ‘Hormuz premium’ is forcing fund managers to re-evaluate risk-return profiles for assets deployed in months rather than years.

The revenue stability gap
While the 100 GW target is ambitious, the financial mechanisms to reach it remain under debate. Le Scornet warns that the target is credible only if governments stop pretending that private capital will shoulder the burden alone. To reach the goal, Europe needs approximately 15 GW per year from 2031 to 2040. “To ensure stable income for developers, at least 10 GW per year will require two-way price guarantee contracts (known as Contracts for Difference or CfDs),” Le Scornet asserts. These contracts fix a set price, protecting developers from market dips and consumers from overpaying during price spikes. “This ensures revenue stability for the developer and protects consumers when market prices are high. PPAs (Power Purchase Agreements) alone will not carry such an increase.”

North Sea electricity is definitely a strategic asset from a geopolitical standpoint

This creates a particular challenge for ‘hybrid’ assets like LionLink, connecting the UK and the Netherlands. Because the UK sits outside the EU’s internal energy market, investors face a dual layer of complexity: navigating different subsidy regimes and market coupling rules while managing significant currency risk.

“Developers are forced to structure PPAs across a GBP/EUR split,” Gasilov explains. “In agreements lasting 15 to 25 years, hedging costs eat into the already thin profit margins of offshore wind.” The lack of standardised contract templates for hybrid-specific risks remains a barrier, leaving institutional investors to manage 25-year currency volatility on a project-by-project basis.

According to Le Scornet, the real bottleneck is not just the capital, but the allocation of risk – specifically concerning grid investment, congestion, curtailment and price gap compensation. Furthermore, policy divergence between the UK and EU remains a primary concern for investors.

In this context, public de-risking becomes the ‘make-or-break’ factor. The roles of the European Investment Bank (EIB) and the UK National Wealth Fund are critical. “Without such public de-risking, the 100 GW target may seem very bullish,” Le Scornet warns. The public sector must act as the primary guarantor to make early-stage, high-risk projects bankable for the private market.

The ‘greenium’ mystery
The final pillar of the North Sea Hub is the capital itself, largely raised through green bonds. However, the pricing of these instruments reveals a complex landscape. Hilda Afeku-Amenyo, a researcher at Montclair State University, points to the concept of the ‘greenium’ – the slightly lower interest rate (or yield discount) investors accept in exchange for a green label. Academic literature, including recent findings by Panizza et al, suggests that the greenium for supranational bonds in advanced economies is approximately two basis points. Interestingly, research by Fatica et al found that the supranational greenium was once several times higher than the corporate one.

“This asymmetry in bond pricing provides one possible reason why institutions like the EIB have chosen to offer loans to North Sea countries rather than establishing dedicated, joint green bond programmes for the region,” Afeku-Amenyo explains. Demand, rather than climate impact alone, continues to drive the corporate green premium, which currently sits between three and eight basis points. A significant hurdle for the formal implementation of the Hamburg Declaration is Taxonomy alignment. According to a 2025 Bruegel policy brief, only nine percent of EU green bonds currently meet the strict criteria of the EU Taxonomy.

More concerning is the sectoral concentration: 79 percent of corporate green bonds that meet these criteria come from utility companies, despite utilities representing only five percent of the EU’s economic output. While this concentration helps offshore wind developers and Transmission System Operators (TSOs) in the short term, the ability of the Taxonomy to accommodate the sheer scale of Hamburg Declaration projects remains an open question.

Evidence from the first year
The first year of the EU Green Bond Standard (EuGBS) has seen approximately €22bn in issuance. However, data from ABN AMRO and IEEFA reveal a surprising trend: there is no measurable pricing advantage for bonds labelled under the EuGBS as opposed to those aligned with the older ICMA standards. Despite this, major players are moving forward. TenneT Germany launched its inaugural Green Finance Framework under the EuGBS in late 2025, and Eurogrid issued a €1.1bn EuGBS-aligned bond in October 2025. Denmark also issued its first sovereign EuGBS late last year.

“These developments indicate a shift towards the adoption of a common green bond standard across the region, rather than towards the development of a common issuing authority,” notes Afeku-Amenyo. The standard is moving faster than the pooling of bonds, leaving the prospect of a unified ‘North Sea Green Bond’ as one of the most intriguing unresolved questions in European finance.

Even with the capital secured, the legal vacuum in the high seas remains a ‘structural heart attack.’ Without a supranational regulatory authority, a project spanning multiple waters requires separate permitting processes and conflicting Environmental Impact Assessments (EIAs). “If a country changes its consenting rules mid-construction, counterparties are left with state-to-state legal disputes (arbitration) at best,” says Gasilov. This policy uncertainty is a significant deterrent for the ‘patient capital’ provided by pension funds. Moreover, biodiversity has moved from an ESG metric to a material financial risk. As wind density increases, the impact on migratory corridors creates permitting delays. However, the industry is fighting back with data. During the recent WindEurope Annual Event 2026 in Madrid, Sofia Ferreira (DHI A/S) presented a framework to quantify environmental vulnerability across 86,000 km², identifying conflict zones before upfront investment costs (CAPEX) are committed.

Policy divergence between the UK and EU remains a primary concern for investors

Operators like TenneT are also proving that infrastructure can act as a catalyst for nature. Saskia Jaarsma reported that High Voltage Offshore Substations (OHVS) are acting as biodiversity hotspots, hosting species like the harbour seal. For the finance community, this eco-friendly infrastructure (Nature-Inclusive Design) is about permitting speed – the faster a project proves ‘Nature Positive’ credentials, the faster it clears the regulatory hurdles of a post-Hormuz world.

The path to an energy union
The 100 GW North Sea Hub is a masterpiece of engineering, but its financial and legal foundations are still under construction. The Hormuz crisis has provided the political will to accelerate, but as Gasilov and the experts in Madrid have highlighted, ‘will’ is not enough to de-risk a trillion-euro investment.

To succeed, the North Sea requires three structural shifts: a unified authority to handle consenting and dispute resolution across all EEZs; a template for cross-border contracts that mitigates the GBP/EUR split and price gap risk (the risk that prices between the UK and EU will not align as expected); and a basin-wide methodology for pricing biodiversity, turning environmental protection into a predictable financial metric. The North Sea has the wind, the technology, and now the geopolitical urgency. If the finance ministers in London and Brussels can match the ambition of the engineers, the North Sea Hub will not only be Europe’s ‘Green Powerhouse’ but also the blueprint for a new era of supranational financial cooperation.

America first, global health last?

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When US President Donald Trump reawakened the venomous ghosts of his ‘America First’ mantra during his second inauguration in January 2025, few could have foreseen the tsunami of disruptions and chaos that he intended to unleash on the global arena. “During every single day, I will, very simply, put America first,” he said with his characteristic bravado. True to his words, Trump has unapologetically caused widespread turmoil, with the US global health programmes being among the biggest casualties. To the administration, the programmes were deeply broken, had become inefficient, wasteful and had created a culture of dependency.

Simply put, they were not serving the interests of the US despite billions in annual budgetary allocations. Trump was clear that maintaining the status quo would not be an option. The outcome is a completely different approach to global health assistance, anchored on the largely controversial and divisive America First Global Health Strategy (AFGHS).

“We must keep what is good about our health foreign assistance programmes while rapidly fixing what is broken. This strategy lays out a plan to do just that,” said Marco Rubio, US Secretary of State. For countries that for decades have depended on the US for health assistance, particularly in dealing with infectious deadly diseases such as HIV, TB, malaria, smallpox, burdensome non-communicable diseases and maternal and infant mortality, AFGHS is an extremely bitter pill. Worse still, the road to its unveiling on September 18, 2025, was paved with painful spikes.

It started with the dismantling of the US Agency for International Development (USAID), which for decades had been the face of US foreign aid with missions primarily concentrated in Africa and Asia. In Africa alone, USAID had committed about $132bn across health systems, economic development and humanitarian relief from 2001 to 2024. The health funding gaps created since its shuttering are widespread and devastating. Nigeria and Botswana are cases in point. The former was left with a whopping $600m hole, while Botswana lost a third of its HIV response funding. Notably, USAID was a key implementing agency of the $110bn President’s Emergency Plan for AIDS Relief (PEPFAR) that has saved over 26 million lives since 2003.

Global shockwaves
While the dismantling of USAID was bad enough, the decision by the Trump administration to withdraw the US from the World Health Organisation (WHO) sent shockwaves across the global health systems. Trump has never hidden his disdain of the global body, which he has accused of mishandling the Covid-19 pandemic, refusing to reform and being prone to undue political influence, specifically from China. For WHO, the US withdrawal was a major blow considering Washington was the top donor providing between 12 and 15 percent of its funding. In 2022–23, the US contributed $1.2bn.

Another layer of the paving was a mission to cut the US government’s global health aid funding, a plan scattered by US legislators who approved a $9.4bn package for the current financial year. Though a cut from the $12.4bn allocated in the 2024–25 financial year, the funding is $5.7bn more than what the Trump administration wanted. A key aspect was the fact that Congress upheld funding for programmes such as PEPFAR, the Global Fund to Fight TB, AIDS and Malaria, and HIV/AIDS.

“The US must understand that a withdrawal from global health commitments makes the world – and therefore the US – less safe and less healthy,” says Michele Barry, Director of the Centre for Innovation in Global Health and senior associate dean for Global Health at Stanford University. She adds that Covid was proof that diseases do not respect geopolitical boundaries and is evidence that weakened healthcare systems anywhere in the world can have ripple effects on the US. Despite attracting unprecedented criticism, the Trump administration contends that the AFGHS will make the US safer, stronger and more prosperous. Through the strategy, the US intends to pivot away from open-ended aid to a system that puts emphasis on accountability, clear objectives and defined milestones within stipulated timelines. In essence, the era of blanket funding is gone.

The administration has built a strong case for AFGHS. Top of the list is the need to address inefficiency and wastefulness. Of the billions allocated for foreign health assistance annually, less than 40 percent is used for supplies and healthcare workers. Of this, approximately 25 percent is used for the purchase of commodities while the remaining goes to employing healthcare workers. The fact that 60 percent is spent on ambiguous expenditures and overhead smacks of wastage.

A serious wastage problem
PEPFAR is the poster child of wastage, according to the US State Department. Of its $4.7bn budget, the programme spent $1bn on medical commodity purchases, transport and delivery and $600m on its 270,000 frontline workforce. The remaining $3.1bn was spent on activities such as training, mentorship, supervision, and quality management among others. AFGHS is also designed to cut out the roles of non-governmental organisations (NGOs) in US-funded programmes. To the Trump administration, NGOs have been co-conspirators in aiding wastage with their ‘perverse incentives’ enabling them to self-perpetuate. For the strategy to be effective in saving millions of lives and assisting countries in developing resilient and durable health systems, removing NGOs from the equation and transitioning programmes to local ownership is seen as critical.

The health funding gaps that have been created are widespread and devastating

Though saving taxpayers’ dollars is paramount, the pillars on which AFGHS stands are causing disquiet across the globe, specifically among countries that are dependent on US health assistance. With regards to keeping America safer, the US intends to strengthen global surveillance systems to detect outbreaks to ensure quick response before they reach its shores. Part of this will involve posting a larger number of staff in geographies perceived as high-risk when it comes to outbreaks. To some, this amounts to an invasion of countries’ independence in managing the sovereignty of their health systems.

With regards to making America stronger, the plan is to enter into strategic multi-year bilateral agreements that require countries to co-invest, while on the prosperity pillar, the US will be seeking to create markets for its companies and innovators. Specifically, countries that sign the agreements will be required to open their markets to US health innovations and products. Africa, where the US is aggressively pushing AFGHS, is a key target considering that US pharmaceutical exports to Africa account for only 4.4 percent with India, China and Europe dominating.

“The US is clearly leveraging its central position on the global stage as one of the few actors capable of mobilising financing at scale in an increasingly extractive and transactional way,” states Lami Mabifa, a consultant at Africa Practice. He adds that the explicit linkage between global health cooperation and US national interests could prove highly disruptive.

This is already happening. Critics reckon AFGHS is not only exposing the globe to vulnerabilities of outbreaks but is also a clear representation of modern-day biomedical imperialism by the US. Since its launch in September 2025, at least 28 countries (22 of them in Africa) have signed memoranda of understandings (MOUs) with the US. Most have signed under duress because they need to fill gaps in health funding, a reality amplified by the fact that Africa’s health sector faces a staggering $66bn in annual financing gap.

For the countries that have signed the bilateral agreements, US State Department data show Washington has availed $12.7bn in assistance with partner governments contributing $7.8bn in co-financing commitments. This notwithstanding the fact that most countries are feeling the heavy weight of co-investing. A case in point is Nigeria. While the US is contributing $2.1bn, the country is required to raise $3bn, an amount that is close to 40 percent of its 2025 health budget allocation.

Spending commitments
While at one level the co-investment provisions respond to a longstanding concern across Africa that external aid can foster dependency and leave health systems vulnerable when donor funding is withdrawn, on another level it is locking countries into spending commitments that are difficult to meet. The challenge is compounded by the fact that in some of the MOUs, the US is tying financing to sensitive data sharing. For instance, countries are required to share biological specimens and genetic sequence data of pathogens with epidemic potential in the shortest time possible after detection. Besides, some agreements have locked data and specimen sharing arrangements for up to 10 years, well beyond the funding cycle.

These conditions have become the breeding grounds for resistance. Zimbabwe is among countries that have turned their backs. Despite being eligible for $367m in US funding, Harare refused to commit after it was told to share sensitive data. A near similar situation unfolded in Kenya, the first country to sign the MOUs. Despite securing $1.6bn in funding, implementation was suspended by the High Court over concerns on data protection and the constitutionality of the agreement. In Zambia, the US plans to arm-twist the country and tie a $1bn funding to access to critical minerals such as copper, cobalt and lithium ended up backfiring.

“Global health crises cannot be contained through a patchwork of bilateral agreements,” notes Barry. She adds that outbreaks demand cooperation, coordinated, multilateral responses rooted in trust and shared responsibility. “Retreating from multilateral institutions undermines both US security and global preparedness.”

Part of the reasons why the agreements are being termed as ‘patchworks’ is because they are time-bound (averaging five years) and also contain withdrawal clauses, with any party free to exit upon giving a notice of 180 days. This creates room for abrupt disruptions of programmes, some of which are designed to run for years

The dollar’s greatest threat is America itself

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Economic historian Barry Eichengreen has long been one of the most insightful guides to the global monetary system. In his recent book Money Beyond Borders: Global Currencies from Croesus to Crypto, the George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, Berkeley, turns his attention to how money is evolving in a world of rapid technological and geopolitical change. From the rise of stablecoins to shifting power between the dollar and emerging challengers, Eichengreen explores what it means for global currencies to move ever more freely across borders while governments try to retain control. The book blends economic history – from ancient Greece to medieval Florence, Amsterdam and then Britain’s handover of global financial leadership to the US – with sharp analysis of today’s monetary debates. In this exclusive interview with World Finance’s correspondent Alex Katsomitros, Eichengreen reflects on how domestic political challenges affect the dollar’s global status, the risks and opportunities posed by innovation, and whether dollar dominance can endure in a fragmented world economy.

What is the biggest threat to the dollar’s dominance right now?
The US itself. Not the economy, but rather US politics. Global currency status has political as well as economic and financial preconditions. These domestic political preconditions are at risk at the moment. Global investors have to be confident that the rule of law, separation of powers, control of corruption and respect for Fed independence are intact. They have to be confident about the country’s foreign policy, whether its alliance policies are sound and stable, whether the US is still regarded as a reliable alliance partner because central banks, governments, firms and commercial banks use the currency of partners who are viewed as reliable stewards of their holdings. There are questions about that.

Would a more isolationist Fed undermine the dollar’s global status, given its role as a global lender of last resort?
The Fed has played an important role by extending dollar swap lines to foreign central banks, which is a foundation stone of the global dollar. Foreign central banks will only be comfortable about seeing banks and firms under their jurisdiction holding dollars if those central banks can act as dollar lenders of last resort because they can swap their currencies for dollars with the Fed. If we have a nationalistic US president who insists on nationalistic behaviour by the central bank, things will be different. Take President Trump’s supposed temporary appointee to the Fed Board, Stephen Miran, who thinks the US should not provide global public goods by acting as a global lender of last resort and that we should demand recompense prior to doing that. Kevin Warsh wants to shrink the Fed’s balance sheet. Will a central bank with a smaller balance sheet that focuses narrowly on its domestic responsibilities still act as a global provider of dollar liquidity? I have my doubts, and this makes me even more worried about the prospects of the dollar as a dominant global currency.

Are there any parallels between what the Nixon administration was doing in the 1970s to deal with the balance-of-payments deficit and what the Trump administration is doing now with tariffs?
There are two parallels. One, both administrations wanted a weaker dollar to boost export competitiveness and address that balance of payments weakness. The reason Nixon imposed a 10 percent import surcharge in August 1971 was to allow the dollar to depreciate without other governments depreciating their currencies. Only after that currency alignment was he prepared to remove the import surcharge. That is similar to the Mar-a-Lago Accord. We hear today that the dollar should be devalued, and tariffs are used to induce foreign governments to go along. The second parallel is that it didn’t work then, and it’s not working now. The dollar is item number 10 down the list of determinants of US competitiveness. That competitiveness depends on our productivity growth; investment in the skills and training of our workers; entrepreneurship; capital investment; tax system efficiency. Further down on the list comes whether the dollar is 10 percent higher or lower.

Most economists consider the dollar an exorbitant privilege for the US. Some, however, even in President Trump’s circle, suggest that it is a burden. What do you think?
I see both sides of the coin. There have been dominant currencies in the past that faced problems of international competitiveness or overvaluation because of the large global demand to hold them as reserves. That was the case of Florence in the 15th century, Amsterdam in the 18th century, and the UK in the late 19th century and early 20th century. My evaluation is that the benefits outweigh the costs. The benefits are convenience, being able to do cross-border business in your own currency, which aids competitiveness; funding the Treasury’s debt at lower cost because there’s demand for Treasurys; an automatic form of insurance that you are the safe haven currency and funds flow into your markets when volatility spikes, rather than experiencing capital flight and financial market collapse. Finally, your financial sanctions are more effective than they would be otherwise.

When the euro was created many people expected it to compete with the dollar. Why hasn’t this happened?
The euro has gained zero ground on the dollar as a global currency since 2001. The reason is resistance from special interests and lack of political will at the national level. There are three prerequisites for a larger global role.

One, a capital markets union, which would create a more liquid market in euro-denominated government securities. But the banks don’t like this idea; they want to hold on to their part of financial business for investment funds in Luxembourg and Ireland. They want to keep regulation at home rather than allowing it to migrate to Brussels or Paris, where it would foster a capital market union.

Two, there is a shortage of safe euro-denominated assets. There are only three European governments with triple-A ratings from all rating agencies. They have around €3trn worth of government securities between them, compared to $30trn to $40trn worth of US Treasurys. The EU could issue more bonds of its own. There are schemes where the EU would buy up national government bonds, and use the interest paid to it by national governments to issue and service its own bonds. But national governments are reluctant to see those schemes implemented.

Three, there is no common EU defence and security policy. Leading global currencies are the currencies of political entities that can secure their borders and build strong alliances with foreign partners. The EU and its citizens are beginning to think about the importance of not relying on the US for security and building that common EU policy. But there is this famous observation that 13 different EU countries are producing 13 different tanks. How can you have an effective tank battalion on the battlefield, absent greater integration?

Do you consider the renminbi a stronger rival to the dollar?
The playbook the Chinese authorities are following is taken directly from what the Fed did, starting in 1914, to promote use of the renminbi for cross-border trade settlements with China itself, and once that process is underway, to promote purely financial transactions. They are building the relevant infrastructure, the Chinese cross-border interbank payments system with close to 200 direct participants and 1,600 indirect participants. They have an electronic platform, mBridge, built with four other monetary authorities and central banks. They are moving as fast as they can. The People’s Bank of China has extended more currency swap agreements to foreign central banks than the Fed or the ECB. But they are starting out way behind.

They have been internationalising their currency for a little more than a decade. The US has been doing so for more than a century. The US accounts for nearly 60 percent of global foreign exchange reserves. China accounts for two percent. China’s cross-border renminbi transactions have been growing at double-digit rates, whereas their growth has slowed down. Nothing in China is growing at double-digit rates anymore. And then there are the political obstacles. I described my doubts about US politics and how that can negatively affect the dollar. Checks and balances, rule of law, regulatory transparency – these are not characteristics of the Chinese political system. Will they grant independence to their central bank? Will they allow competing political parties? Obviously not in my lifetime.

Are stablecoins a threat to the dollar’s dominance – or a digital tool to preserve it?
I would distinguish the token from the payments rails, which are blockchain or distributed ledger technology. One of my book’s themes is that financial and payments technology is always changing. Blockchain and distributed ledger technology is here to stay and will provide another vehicle through which cross-border transactions are completed. We don’t know what kind of units will run on those rails. Will they be privately issued stablecoins? 99 percent of them are linked to the dollar. Or will they be a combination of tokenised commercial bank deposits and central bank digital currency (CBDC) to create finality? Those units can also run on a permissioned blockchain. Both the ECB and the People’s Bank of China are betting on tokenised commercial bank deposits and a CBDC. In the US, Congress has prohibited the Fed from issuing a CBDC. My view is that we are betting on the wrong horse and that privately issued stablecoins may turn out not to be stable and fungible. If Amazon and Walmart issue stablecoins, will we be able to use Walmart Coin at Amazon and Amazon Coin at Walmart? Tokenised bank deposits take advantage of an already existing banking system inside the regulatory perimeter that is important for stability. Commercial banks have already made progress in figuring out how to issue and manage a CBDC. Time will tell which horse ends up winning the race.

What would a world without dollar dominance look like?
It would make for a more fragmented global monetary and financial system. If you imagine a dollar area, a euro area and a renminbi area, it’s important to design these areas to overlap with one another and maintain a semblance of transactions between them. Imagine a scenario where China and the countries around it do business only in renminbi and the US is on such bad terms with China that we do no business using the renminbi. We know from the 1930s that is disastrous. So we have to design monetary systems where the blocs can do business with one another.

Cybercrime emerges from the dark web

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When Cybercrime magazine predicted in 2020 that the scourge of cyberattacks would cost the world $10.5trn by 2025, many considered the estimate to be wildly exaggerated. In fact, it is turning out to be absolutely correct. The actual cumulative cost of cyberattacks in 2024 was $9.5trn and, although the figures aren’t yet out for 2025, the rate of increase is on target. Considering that the price of these pernicious economic invasions was $3trn in 2015, cybercrime has clearly become a growth industry of apocalyptic proportions. If cybercrime were seen as an economy in its own right, it would be the third biggest in the world after the US and China. And the damage is mounting by the day.

As Cybercrime magazine’s editor-in-chief Steve Morgan wrote at the time about the exponential danger of these attacks: “They represent the greatest transfer of economic wealth in history, risks the incentives for innovation and investment, is exponentially larger than the damage inflicted from natural disasters in a year, and will be more profitable than the global trade of all major illegal drugs combined.” Legendary investor and economic philosopher Warren Buffett agrees, describing cybercrime as mankind’s main problem and ranking it as a bigger threat to humanity than nuclear weapons.

Assembly lines hit
Many victim companies can attest to that, as the following recent examples show. South Korean e-commerce platform Coupang took a hit in December 2025 that stole the personal details of nearly 35 million users. A month earlier, attackers cracked the commercially sensitive data of over 200 companies connected through the system of Salesforce, a customer relationship management platform. In September the assembly lines of British automotive giant Jaguar Land Rover ground to a halt for several weeks after the shadowy Spider group of young hackers mounted a ransomware attack that cost the group about $2.2bn in lost production. And in April cyber-criminals penetrated the digital and in-store operations of one of the UK’s favourite retailers, Marks & Spencer, with devastating effect – the group suffered a loss of between £200m–£300m. This has been coming for a long time.

Warren Buffett described cybercrime as a bigger threat to humanity than nuclear weapons

The founder of a cyberprotection company told me years ago how he was able to convince sceptical major banks that they were highly vulnerable. “I asked the board permission for my experts to try and hack into their systems,” he said. “I estimated it would take 20 minutes.” And it usually did.

Just about every day these attacks are ravaging businesses, governments and other organisations worldwide. “In 2025 major cybercrime attacks on businesses were dominated by massive cryptocurrency thefts, sophisticated third-party vendor breaches, and disruptive ransomware,” reports the Centre for Strategic and International Studies. To take just ransomware, also in 2025 a gang was able to halt emergency services across several American states in an attack at OnSolve, a critical risk management provider, in a CodeRED alert system breach.

Hardly a month passes without a damaging and sometimes crippling attack by a wide variety of cybercriminals that run from computer-savvy youths who think it is fun to government-sponsored agencies engaged in systematic industrial espionage. For instance, according to the Centre for Strategic and International studies, in December 2025 a Russia-linked group named Electrum knocked out about 30 sites in Poland’s energy grid. In January 2026 Pakistan’s Transparent Tribe launched a campaign on a wide variety of Indian institutions including government departments in retaliation for fighting on the border. Also in January a unit of Russia’s military intelligence service placed a creeping multi-stage infection in government departments in Central and Eastern Europe. In a nice irony, around the same time Russia was hit in what was surely a spoof attack, when deliveries of the Vladimir Bread Factory, a key regional producer, were thrown into chaos after a tit-for-tat raid corrupted its online systems.

State-sponsored cybercrime is highly organised. In March another Russian cybercrime cell demanded payment after breaching the systems of the German Democratic Socialist Party while, in America, Iranian hacker Handala heavily disrupted the operations of Stryker, a manufacturer of medical devices, in what it claimed was retaliation for the US bombing of the girls’ school in the south of the country. Few countries are immune. In another example of state-backed cyberterrorism, all four of Singapore’s biggest telecommunications companies suffered a months-long invasion by UNC3886, a China-linked group, in July 2025.

Dark web
Cybercrime investigators say the dark web, impenetrable to everybody except skilled practitioners, has become a gigantic pool for the malware, exploit kits and other tools that are used to inflict economic mayhem. These weapons have become so powerful that they could disable the economy of a city, state or even an entire country.

But cyberattacks also cause untold damage at all levels. As insurance industry magazine Atlas records, citing the Data Breach Investigations Report, there were more than 22,000 cyber-incidents in 2025 involving public and private organisations in 139 countries. Individuals count among the victims, no less than 426 million suffering data breaches.

The hardest-hit nation is the US, followed by France, India, Germany and Russia. “Data breaches are no longer isolated incidents but a real threat that has become an integral part of today’s digital environment,” notes Atlas. In other words, any enterprise that has an online presence could be in the firing line.

Although the rapid spread of artificial intelligence is blocking some of these attacks, the economic damage continues to mount. In 2025 the average cost of a cyberattack was put at $4.44m but it is more than double that in the US at $10.2m. At this rate we are heading to financial Armageddon, according to the IMF. As just about every business, big or small, goes online – or works with others who are online – the risks multiply. “This phenomenon generates colossal economic costs that could affect macro-financial stability on a global scale,” the IMF warns, forecasting cumulative losses of $23trn by 2027 incurred from direct losses triggered by ransomware, data theft, embezzlement and fraud, among others, as well as indirect costs such as reputational damage, legal fees and regulatory fines. For instance, in a typical example of collateral damage the British government had to come up with an emergency £1.7bn loan to prop up Jaguar Land Rover and its lengthy chain of suppliers.

No industry is safe. In 2025, the worst year so far for cybercrime, Japanese brewer Asahi had to stop all production across the entire Asia-Pacific, while Australia’s Qantas airline suffered a data leak of about five million customers. While the latter attack didn’t shut down the system, the carrier was immediately hit by an avalanche of class-action threats and official fines that some sources say could go as high as $4.6bn.

The ingenuity of cybercriminals keeps improving. One of their favourite scams is known as ‘CEO fraud’ whereby the criminal poses as the boss by using artificially generated videos and voice to trick an employee into transferring money or disclosing commercially confidential information.

Although there is insurance cover against cybercrime, it is expensive in what is a fast-growing market. In 2024, according to market sources, premiums valued at $15.3bn were written in 2024 and they are rising all the time. One of the giants of the industry, Munich Re, estimates the market will hit $32.4bn by 2030. But of course the economic damage has already been done.

Non-state actors
Digitisation lies at the heart of what experts see as a phenomenon that could play havoc with life as we know it. “Over the next two decades militancy, terrorism and organised crime will profoundly change as non-state armed actors adopt many of the same technologies used by conventional armies and everyday society,” warned experts from American think tank, Brookings Institute, in early 2026 in a chilling assessment of where things are heading. “Criminal and militant groups are already espousing many emerging and existing technologies – using drones for smuggling and violence, artificial intelligence systems to develop new synthetic drugs, and digital currencies to hide and launder money.”

Previously, the Brookings Institute argues, terrorists, drug cartels and quasi-military groups needed large swathes of territory to wage crime and exercise control by physical domination. “Today however, new technologies, such as synthetic drugs production, digital payment systems, artificial intelligence and networked devices, are eroding the traditional benefits and reasons for holding territory, especially its role in generating revenue,” the institute explains. This may prove to be a prophetic observation that identifies AI-enabled scams, online fraud, ransomware operations and cryptocurrency-based laundering that yield “earnings larger than the taxation of legal or illegal economies.”

The institute’s calculations suggest that the new wired, always-on brand of criminals rack up global profits of over a trillion dollars a year – and up to hundreds of billions in the US alone. “Over time, these activities will supplement and increasingly displace more traditional sources of income for criminals and militants,” it concludes. And they are running less risk. Without troubling the underground arms market that is under constant surveillance by the authorities, well-organised Brazilian gangs are printing high-powered rifles by 3D – ‘ghost guns’ that can’t be traced. And, learning from the military, targets can be taken out from great distances by relatively cheap drones.

The overall consequence is that it will become much harder for traditional law enforcement to police crime that is committed far from where the damage is caused. As experts warn, a handful of individuals are already running automated scams, deepfake identity fraud and algorithmic phishing, often from locations like basements in distant cities that are hard to detect. In short, economic havoc can be caused remotely on a shoestring.

The ‘AI-first’ CEO

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Every day, Google processes billions of search queries. As the most-visited website in the world, it owns the vast majority of global market share among search engines. But the technology behemoth is, of course, much more than a search engine alone. Google’s parent company, Alphabet, is behind several technologies that have become integral to daily life for huge swathes of people, from Google Maps and Gmail to Android and YouTube. Newer products, like Gemini, a generative artificial intelligence (AI) chatbot, and Waymo’s self-driving cars, are also taking off. In Alphabet’s first quarter earnings of 2026, the company said the number of paid subscriptions of the Gemini app had reached 350 million, while Waymo had launched in six new cities in 2026 and surpassed 500,000 fully autonomous rides per week, doubling in less than a year.

Sundar Pichai, the CEO of Google since 2015 and Alphabet since 2019, has not only led the tech giant to these incredible milestones, but he has also been the driving force behind several Google products that grew from unlikely upstarts to household names, such as Google Chrome and Drive. However, compared with the bosses of his competitors, Pichai takes a quieter, behind-the-scenes approach.

“Sundar Pichai’s career path is rooted in product leadership rather than founding mythology, and that shapes how he runs Alphabet,” Joe Crist, a cybersecurity and IT services CEO of Transform 42 Inc, which helps organisations scale sustainably, told World Finance. Crist puts Pichai’s success down to this brand of steady leadership. “He operates as a scale leader, focused on maintaining stability across a highly complex organisation rather than constantly reshaping it. That consistency gives engineering teams continuity and avoids the kind of frequent strategic shifts that can disrupt execution.”

Despite the monumental successes Pichai has overseen, the question on every investor’s lips today is whether the tech giant’s momentum can be sustained through the AI race, and whether its vast network of users will hinder its innovative potential or help it to come out on top.

Humble beginnings to tech titan
Born and raised in Chennai, southern India, Pichai arrived in the US in 1993 with a scholarship to study at Stanford University, where he earned his master’s degree in materials science and engineering. Not long after that, he obtained his MBA from the University of Pennsylvania’s Wharton School.

Pichai took up brief roles at semiconductor manufacturer Applied Materials and management consulting firm McKinsey & Co, but he had always been drawn to the allure of Silicon Valley. “I used to read about what was happening in Silicon Valley, and I wanted to be a part of it,” Pichai said in a 2014 interview at Delhi University. In 2004, he began his career at Google with a product management role. His first project was Google Toolbar, a feature that made it easier for users of Microsoft’s Internet Explorer and Mozilla Firefox web browsers to integrate Google’s search engine.

From there, he was soon promoted to vice president of product development, and he played a key role in developing Google’s own web browser, Chrome. This was no mean feat. “When we built Chrome, we had one percent market share one year after we launched,” Pichai told Time. Now, Chrome is the most used browser in the world. As the years passed, Pichai continued to climb the ranks, helped by an almost uncanny ability to create products and software that customers really wanted. “He has an exceptional sense for craft and the details in a product, all the way down to the pixels on the screen, the sound of a voice, the tactile feedback,” Clay Bavor, who worked under Pichai at Google for a decade, told Time magazine. Pichai soon became a right-hand man to Google co-founder Larry Page. “Sundar has a tremendous ability to see what is ahead and mobilise teams around the super important stuff,” Page wrote in a memo in 2014, announcing Pichai’s promotion to lead Google’s core products. “We very much see eye-to-eye when it comes to product, which makes him the perfect fit for this role.”

Pichai’s steady successes saw him reportedly pursued by tech rivals Twitter and Microsoft for leadership roles, but his loyalty to Google was rewarded with the top job in 2015, when Page and Sergey Brin created Alphabet as an umbrella company.

His work at the helm of Google, and later, after Page stepped down, Alphabet, included the creation of the Pixel smartphone; the launch of Google Home, previously known as Google Nest following the $3.2bn purchase of Nest Labs in 2014; and a strong push for AI innovations. Pichai’s achievements propelled Alphabet’s market capitalisation over the $4trn mark in early 2026 – only the fourth company to ever do so – and his own net worth to approximately $1.7bn, according to Forbes.

“Pichai’s leadership trajectory is closely tied to product execution at planetary scale,” Will Steward, who has nearly two decades of experience advising fast-growing tech employers and jobseekers as CEO and co-founder of The SaaS Jobs, told World Finance. “His early work on Chrome and later Android positioned him at the centre of Google’s distribution infrastructure, which effectively became the foundation of the company’s global reach,” he said. “That background has shaped a leadership style focused on system coherence, where success is measured by how well large platforms function together rather than isolated product breakthroughs.

“As chief executive, he has presided over a shift from single-discipline dominance in search advertising towards a multi-layered platform business,” Steward continued. “His approach has been to unify and ensure that infrastructure, advertising, devices and cloud services remain technically aligned. This has allowed Google to evolve without losing continuity across its core systems.”

While Pichai’s career has risen to dizzying heights, he came from a modest upbringing; it has been reported that he and his brother slept on the living room floor of a small family home growing up, and Pichai once said his father spent a year’s salary on his plane ticket to California so he could attend Stanford.

The journey of Sundar Pichai is one where opportunity and ambition collided to create a monumental success. “If he wants to do something, you’re not going to be able to stop him,” Caesar Sengupta, a former Google colleague, told Time magazine. “He is just going to be super nice about it. And then, you cannot move him.” Indeed, Pichai has generally been well liked as a leader at Google. In more recent years, however, he has faced criticism: first from Timnit Gebru, an AI ethicist who was fired in 2020 and said Pichai and other managers created “hostile work environments,” and more recently over sweeping job cuts.

Pichai’s story also champions the transformative power of technology – something that he is a firm advocate for. Growing up, Pichai had limited access to tech. He described being on a government waitlist for a rotary telephone for five years, and the radical impact when the family finally got one. “When you see the appetite and the desire for people to make their lives better by gaining access to technology, that is what compels me to go beyond,” he said in a 2022 interview on Stanford’s View From the Top podcast.

The AI race begins
Today, technology is quickly reaching heady new heights. Ever since OpenAI’s ChatGPT burst onto the scene in 2022 and transformed the general public’s understanding of the real-world potential of AI, investors and market watchers have sought to predict which of the Magnificent Six tech firms will come out on top. Some industry observers criticised Google for moving too slowly. Yet, as early as 2016 Pichai had declared Google to be an ‘AI-first’ company, shifting from a focus on mobile. For years, Pichai has worked in the background to shore up a strong foundation of custom-built chips, research and infrastructure to propel Google into the AI arms race. Today, Gemini accounts for a quarter of all AI traffic, up from just six percent last year, according to Similarweb.

AI will touch every aspect of our lives, every aspect of society, every industry sector”

“Google is structurally strong in AI due to its full-stack control of model development and distribution,” said Steward. “Its custom silicon, global compute infrastructure and long history in deep learning research give it an end-to-end capability that few competitors can match. This enables efficient training and deployment cycles at a massive scale,” he pointed out. Google acquired DeepMind, its AI research lab, back in 2014, and it has spent the years since making quiet breakthroughs on everything from voice recognition to image processing. In 2016, DeepMind made headlines when one of its neural network models beat a world champion in Go in a five-game match. It was a clarifying moment for Pichai. “I understood the potential of the technology to make sharp jumps,” he told Time. Since then, he has pushed Google to implement AI in practical ways for users.

The company’s integration-led approach has allowed it to become, seemingly, an overnight leader in AI technology. “Instead of focusing primarily on standalone AI tools, the strategy is to embed AI capabilities directly into existing products, which means new features reach users through systems they already rely on without requiring behaviour change,” Crist told World Finance. Google has a leg up here compared to any new tech start-ups. “Users don’t need to adopt entirely new platforms, which makes adoption more realistic in regulated or risk-sensitive environments,” Crist says.

Google Search, for example, integrates generative AI models into its core of information retrieval. “Search is evolving from a list-based interface into a synthesis layer where AI-generated responses reshape how users interact with web content,” said Steward. “This is a fundamental product transition rather than a feature upgrade.”

Even with one of the strongest AI research capabilities in the sector, Crist argues that Google’s true defining asset is its controlled deployment of AI features. Steward agreed: “Compared with competitors, Google’s advantage lies in vertical integration. It can train models, deploy them, and immediately place them inside products used daily by billions of users. That loop between infrastructure and interface is one of its most powerful assets in the current AI cycle.”

In-built ease and collaboration align with Pichai’s personal philosophy around AI. Speaking on the Harvard Business Review’s IdeaCast podcast in 2023, he described AI’s inflection point as being driven by human–AI collaboration.

“Software engineers often do something called pair programming. We have found that two programmers working together are better than them working separately,” he said. “So you can now imagine AI being your paired programmer or paired financial analyst or name if you will. So I think that’s the direction, that’s the promise and we are seeing it happen.”

Uncertain future
While AI has the power to transform life for many, Pichai is aware of its risks, too. In fact, speaking to the widespread fear of AI eating up jobs, Pichai admitted that the role of CEO would be “one of the easier things maybe for an AI to do one day” in an interview with the BBC.

What’s more, Pichai has himself become “unsettled” by “the power of what is possible” with AI. On the IdeaCast podcast, he described engaging with a large language model with a persona of the planet Pluto. Together with his son, he had conversations with the chatbot and described it as a “wonderful learning tool” that could offer facts about the solar system. “But there was a moment talking to Pluto at some point I felt like it felt very, very lonely and the conversation slightly went to a darker place, and that was my first experience, which kind of unsettled me and showed the power of what’s possible, the effect it can have on humans,” Pichai said.

It made sense, he went on, considering the context: Pluto is in a cold, faraway place in the universe, “So no wonder that it kind of started taking some of those attributes in its personality.” But after this experience, he said he strives to balance the “amazing opportunities to be unlocked” with responsible innovation. “These are powerful models, and I think a lot of us are working on making sure we build in safety systems, we add a layer of responsibility before we really widely deploy it. It is part of the reason I think as Google, we have been more conservative in our approach given the scale at which we serve users,” Pichai said.

While Google’s AI capabilities have seemed to appear suddenly, in reality they are projects many years in the making. But with the AI race in full swing, Pichai has no intention of slowing down now. In fact, he is stepping up capital expenditure on AI. Earlier this year, Pichai announced that Alphabet would double capex spending to up to $185bn, well above analysts’ forecasts of $120bn. “Our capex spend this year is an eye towards the future,” he told investors. “The demand we are seeing across the board for our services – and what we need to invest in Google DeepMind and in Cloud – is exceptionally strong.”

Having long been an AI advocate, it is no surprise that Pichai is all in on the technology. Speaking on IdeaCast he called AI a ‘deep platform shift.’ “Many years ago I called AI the most profound technology humanity is working on and will ever work on, more profound than fire or electricity. And that was the reason we said our company is going to be AI first,” he said. “It will touch every aspect of our lives, every aspect of society, every industry sector, if you will.” And while many people are laser focused on generative AI thanks to the huge leaps seen by chatbots, Pichai believes this is just “a moment in time” and “one aspect of AI.”

“I think there is more progress to be had, and I do think we will go through some moments of ups and downs, but the progress I think will continue. I think we should channel all this excitement to make sure other stakeholders are getting involved,” he continued. From governments to nonprofits and academic institutions, Pichai is keen to see international communities coming together to develop frameworks to align on safety and responsibility for AI.

Regulation and red tape is nothing new for Google – Pichai has had to deal with European regulatory roadblocks and lawsuits in the US for alleged monopoly tactics. Speaking on Harvard Business Review’s IdeaCast, he said AI is “too important an area not to regulate, and also too important an area not to regulate well.”

While he urged allowing technology to develop in its early stages, he acknowledged that safeguards should be built at the same time. In particular, he called for a framework where governments or regulators could validate AI models and ensure they are safe for public use. “We need to embrace the excitement and channel it in a way in which as society, as humanity, we are building the foundational blocks to tackle what is coming our way as well,” he said.

This is evidenced in Google’s approach to AI, which “prioritises reliability within established workflows,” Crist says. “In sectors like healthcare or finance, that discipline matters more than speed. A fast but unstable AI tool creates operational risk, not efficiency.”

An AI superpower?
Alphabet is better positioned today to compete in the AI race than many had thought would be possible a year or two ago, Dhruv Datta, who specialises in mobile app development, told World Finance. “Alphabet appears to have significant depth,” Datta says, pointing not only to Gemini but also Google Cloud, custom-designed chips and years of AI development experience with Google’s search engine and Android platforms providing distribution channels for these technologies.

But technical capability alone is not enough to create a true AI superpower. “In order for AI to become widely adopted, it will need to be perceived as trustworthy, capable of delivering results rapidly, valuable and economically viable on a massive scale,” he said.

Is Pichai the man for the job? According to Neal Mohan, the CEO of YouTube, Pichai’s insights with AI “foreshadow these huge trends, but they are also very, very precise,” he told Time. Crist described his leadership style as “deliberate, incremental and low drama,” all of which has helped Pichai to steer a company of Alphabet’s size and technical depth steadily, especially during periods of regulatory pressure and cultural scrutiny. “This is not a style built on constant public repositioning or dramatic pivots, but one of operational control and consistency at scale, which is often underestimated in large technology organisations,” Crist said.

Going forwards, Datta said he believes Pichai’s biggest test will be achieving balance. “On the one hand, he must continue to safeguard the core search business which still drives nearly all of Alphabet’s revenue. At the same time, he will need to enable a transformation of how search operates. He will also need to make significant investments in the infrastructure required for AI applications while demonstrating that those investments generate sustained economic value.” And, perhaps most importantly, he “must be able to do so quickly without damaging the trust and reliability users currently place in Google,” Datta said.

In a time of revolutionary technologies, the temptation to ‘move fast and break things’ is great. But while Alphabet’s size may slow it down, Pichai has shown time and time again that being the first is not the same as being the best.

Can Britain still create a Norway-style wealth fund?

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Norway and the UK struck oil in the North Sea at roughly the same time, extracting comparable riches over the ensuing decades. However, while Norway built a financial fortress, courtesy of its Government Pension Fund Global, which is currently worth over $2trn and continually compounding interest for future generations, the UK chose to spend, tax, and move on, and is consequently sitting with £2.8trn of national debt with the government borrowing just to cover day-to-day spending. But any honest answer as to what went wrong, and whether anything can be salvaged, runs straight into uncomfortable territory because the arithmetic only works one way: more drilling, not less. And with the Energy Profits Levy hitting 78 percent total effective tax on North Sea operators in 2026, that conversation has become urgent, taboo and long overdue.

How Norway built a $2trn fortress
Norway’s oil story didn’t end with extraction; it began there. The idea for a Norwegian oil fund was first conceived in 1960, as the then Prime Minister, Einar Gerhardsen, and his government claimed sovereignty over the ‘Norwegian continental shelf.’ Oil was first struck in 1969, but it wasn’t until 1990 that the government passed a law to create the Government Petroleum Fund, with the simple principle: oil wealth is finite, but financial capital doesn’t have to be. The first deposit arrived in 1996, and today, the fund is approaching $2trn, owns roughly 1.5 percent of all listed companies worldwide, and gives each Norwegian a theoretical stake worth hundreds of thousands of dollars.

As soon as revenues flowed into general expenditure they flowed out almost as quickly

The Norwegian Fund doesn’t just have scale, but discipline. All oil and gas revenues flow directly into the fund, rather than being spent on day-to-day government needs. The money is then invested globally, in the same way as the Norwegian central bank’s foreign exchange reserves, across thousands of companies, including major stakes in US tech giants, turning North Sea oil into a diversified, income-generating portfolio.

Crucially though, Norway spends only the expected long-term return, around three percent annually, under its fiscal rule, preserving the core wealth for future generations. Managed independently by Norges Bank Investment Management, the system has largely remained insulated from political short-termism. There is no secret here, just a sustained national choice to save rather than spend.

The UK’s squandered opportunity
The UK, meanwhile, extracted approximately £400bn in North Sea oil revenues in today’s money between 1975 and 2022. But, unlike Norway, not a penny of it was saved in a long-term wealth vehicle. All of it went into the general spending pool, and most of it vanished without structural trace.

The critical fork came in the 1980s. While Norway was quietly establishing the architecture of what would become the world’s largest sovereign wealth fund, Margaret Thatcher’s government was using North Sea revenues for something more immediately pressing in the UK: managing the social cost of deindustrialisation such as unemployment benefits and redundancy payments. Oil money funded the transition of the politically necessary, and economically brutal, dismantling of British manufacturing, and then disappeared.

What followed was decades of spend-as-you-go, under successive governments. As soon as revenues flowed into general expenditure they flowed out almost as quickly. Nothing ring-fenced, invested or compounded. But the painful detail is that Britain was warned. Economist Wynne Godley and others argued explicitly for a Norwegian-style fund in the 1970s, before the money arrived in volume, but the proposal was roundly rejected by the then incumbent Labour government, led by James Callaghan. That wasn’t ignorance but a choice. The UK didn’t lack the resource, expertise, or the blueprint, it simply lacked, at the time, the political will to defer gratification, and chose, repeatedly and consciously, to spend tomorrow’s money today.

The Energy Profits Levy and what is left
If the UK ever hopes to emulate Norway, it must start with what remains, but that picture is far less forgiving than it once was. The Energy Profits Levy (EPL) 2026, introduced in 2022 to capture energy company windfalls during a price spike, now sits at the centre of the debate. At its peak, the levy raised a few billion pounds annually, although it’s a fraction of what decades of disciplined saving might have produced.

Layered on top of existing North Sea taxes, the levy pushes the effective rate on oil and gas profits to 78 percent, and critically, it is being applied to a shrinking base. North Sea production has been in long-term decline since its late-1990s peak, with fewer new projects coming online and exploration activity slowing sharply. The result is that the levy has become something the industry plainly calls ‘a going-out-of-business tax’.

There is also a growing tension at the heart of policy that nobody in government seems too keen to resolve; the zealous commitment to net zero while relying on dwindling fossil fuel revenues, and taxing the sector heavily even though it discourages the investment needed to sustain it.

This raises an uncomfortable reality: even if Britain chose to ‘go Norwegian’ tomorrow, it would be doing so with a mature basin, reduced output, and far less time to act.

Could the UK actually do it?
If we strip away the nostalgia, the question becomes clinical: what could Britain realistically build if it started today? The North Sea still holds an estimated 2.9 billion barrels of oil equivalent (BOE) of proven and probable resources, with contingent resources standing at 6.2 billion BOE, and prospective resources estimated at 4.6 billion BOE. At current prices and under the existing EPL regime, that translates into meaningful revenue. But meaningful is not the same as transformative.

Norway’s Government Pension Fund Global didn’t just magically appear overnight; it took more than two decades of disciplined accumulation to reach its current scale. Starting now, even under optimistic assumptions with stable prices, restructured taxation, sustained investment, and a political commitment to ring-fence revenues, the UK could potentially build a reasonably sized fund over 20 to 30 years, but still a fraction of Norway’s position, and dwarfed by the UK’s £2.8trn debt pile. There are three problems in creating such a fund; scalability, governance, and politics, which compound each other.

While the scale problem is real, it is manageable. The governance problem, however, is harder. Norway’s fund works precisely because successive governments can’t easily raid it. Whereas British political culture, with five-year electoral cycles, structural short-termism, and chronic pressure to spend, has never successfully maintained a long-term fiscal vehicle. The Treasury would need ring-fencing robust enough to survive at least six or seven governments. That’s not a technical challenge, but a cultural one.

The political problem may also be the most difficult to overcome. Any serious attempt to build a sovereign wealth fund requires renewed North Sea investment, which, in turn, requires restructuring the EPL and a government to publicly argue that increased fossil fuel extraction serves the national long-term interest. But in 2026, that argument is considered politically radioactive, even where the economic logic is sound. So, while a British sovereign wealth fund is theoretically possible, it’s practically very difficult, and politically near toxic.

Killing Net Zero to save the economy
If a future government wanted to do this seriously, it would need honest policy design. The first step would be to restructure the EPL and replace it with a tiered system that still captures meaningful revenue from mature fields but actively rewards investment on new drilling. Norway’s own petroleum tax model does exactly this: high headline rates, but structured to make exploration viable rather than punitive. The goal isn’t a lower tax take per barrel, but more barrels over a longer period.

However, this requires reopening the North Sea to allow new licensing rounds and exploration, as well as an admission that prioritising domestic production means trading short-term net zero optics for long-term fiscal resilience, because continuing to import gas from Norway and Qatar while shutting down domestic supply is a contradiction, both economically and environmentally.

Crucially though, any revenues would need to be locked away. A UK version of the Norway model only works if it is genuinely ring-fenced, protected by legislation and insulated from political cycles, something closer to a constitutional lock than an OBR-style advisory body. Unfortunately, governance is where most long-term fiscal vehicles in Britain have historically collapsed. A cross-party board working to design the structure would help insulate it from five-year electoral cycles, but cross-party consensus notwithstanding, pretty much anything fiscally related is its own challenge.

Complementary revenue streams, from offshore wind lease revenues, spectrum licences, or future carbon credits, could also help supplement North Sea receipts and partially address the scale problem. However, the final requirement is the hardest: public expectation-setting. This is, by no means, a quick fix, but a 30–40-year project. No sitting politician will preside over its completion. So, the argument has to be intergenerational; the same argument Norway made in 1990 and has largely kept faith with ever since.

While the economics are challenging, they are workable. The limiting factors are whether the UK is willing to think that far ahead, and change a current political culture that has consistently chosen to make future generations slightly poorer in order to make the present slightly more comfortable.

When finance becomes geopolitical

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For much of the post-Cold War period, the global financial system operated under the assumption that it was, if not entirely apolitical, then at least insulated from the harsher realities of geopolitical conflict. Capital flowed across borders with relative ease, reserve assets were treated as sacrosanct, and the infrastructure underpinning global finance, from correspondent banking to payments systems, was seen as broadly neutral.

That assumption is now under sustained pressure. What is emerging is not an economics politics substitutive, but a more complex intersection of both. Geopolitical factors, once peripheral, are increasingly impacting financial decision-making by central banks, sovereign wealth funds, institutional investors and multinational corporations. The implications are huge, not because the system has splintered, but because the perception of it being neutral is fraying. Its evolution of financial sanctions has been the most visible driver of that shift. Historically often symbolic, sanctions have become systemic in scope, capable of isolating entire economies from the global financial architecture.

The shuttering of Russian banks from parts of the SWIFT messaging infrastructure following the invasion of Ukraine and around $300bn of Russian central bank assets immobilised after that, in some cases, was a turning point. These were by no means modest moves; they were tests of the profound ways in which entrenched financial infrastructures can be weaponised as a tool of statecraft. Such actions always have the effect of spreading beyond their intended targets.

Contemporary supply chains, energy markets and cross-border flows of investment are tightly interconnected, meaning sanctions can reverberate through the global economy in non-structural and unpredictable ways. Currency fluctuations, commodity price shocks, and disruptions to trade financing are no longer secondary effects, they are factored into the calculus. This has raised concerns that are felt by legislators and investors, too. Desmond Lachman, a senior fellow at the American Enterprise Institute, said, “the US freezing of Iranian and Russian assets seems to be raising questions as to the reliability of the US as an economic partner.”

The undercurrent here is clear: financial access is no longer all rules-based, it is increasingly conditional upon political alignment. But what is more recent is how sanctions are now anticipated, priced and, in some cases, pre-empted. Banks are incorporating geopolitical risk scenarios into compliance frameworks more and more; asset managers are scrutinising portfolios for sanction exposure; and corporates are also adjusting their supply chains, so they don’t merely deliver efficiency but also are able to weather political disruption. The result is a financial system that is responding to geopolitical shocks before they happen, rather than just dealing with them.

The question of reserves
Nowhere is this more relevant than in the handling of foreign exchange reserves. Reserves stored in major financial centres have been regarded as the ultimate safe asset for many years: liquid, secure and free of political interference. But that assumption has been made murkier by the freezing of Russian sovereign assets. While such steps are not without precedent, their scale and visibility have challenged people to consider what if any geopolitically contested environment is considered ‘safe.’

Banks are incorporating geopolitical risk scenarios into compliance frameworks

Yet the response has been more nuanced than some early remarks implied: “It hasn’t reduced holdings of euro reserves – other factors, notably the yield increase, have mattered more,” says Brad Setser, a senior fellow at the Council on Foreign Relations. That underscores an important point: geopolitical risk is growing but not supplanting long-held financial considerations such as yield and liquidity. Instead, it has been put on top of them. But there are signs of a gradual recalibration.

Central banks are diversifying, especially in emerging markets, not just by currencies, but by jurisdiction and asset type. Gold accumulation has persisted, not as a reaction against the dollar system but as a hedge against potential limits on access to financial assets under political catastrophe.
This has been mirrored, of course, in central banking circles, where policymakers have been putting more value on ‘resilience’ and ‘optionality’ in the management of reserves, suggesting that reserves are now not only judged on factors such as their financial structure but also strategically on the ability through which they can be accessed.

While the idea that the global financial system is fragmenting along geopolitical lines has gained traction in recent years, the structural imbalances that feed global capital flows remain firmly in place. China still runs large current account surpluses that need to be recycled into deficit economies like those in the US and the UK.

These flows, by necessity, cross geopolitical fault lines. Such attempts to create alternative financial architectures through regional payment systems, or through bilateral currency exchanges, have yet to meaningfully displace the dollar-centric system.

Senior market players share this sentiment. Blackrock CEO Larry Fink, in his most recent annual letter, warned not of fragmentation per se, but of a ‘reordering’ of global capital flows, driven by industrial policy, supply chain realignment and national security concerns. The distinction matters. A reordered system may look different at the margins – more regional, more politically conditioned – but it is still deeply interconnected at its core.

Similarly, Christine Lagarde, President of the European Central Bank, has argued that while geopolitical tensions are reshaping trade and investment patterns, they are doing so within an existing framework rather than replacing it. Financial globalisation, in this reading, is evolving, not unwinding. This enduring interdependence places a natural constraint on how far financial decoupling can go. It also explains why, despite political tensions, global capital continues to flow in recognisably familiar patterns.

The changing nature of safe havens
Where geopolitics may be having a more subtle impact is in perceptions of risk, especially around so-called ‘safe haven’ assets. Lachman says that, “US Treasury bonds and the US dollar seem to be losing their safe haven status” amid heightened geopolitical and financial market volatility. Whether justified or not, this perception is of great import.

The US depends on foreign demand to fund its fiscal position, needing to issue around $2trn in new debt each year but refinancing a much larger stock of existing obligations. A sustained shift in investor sentiment would, theoretically, create more complexity here. Still, the counterargument remains compelling. The depth, liquidity and institutional credibility of US financial markets have largely helped anchor global portfolios. As Setser observes, “most flows are still driven by considerations of return.” It is the tension between perception and structure that will define the next phase of global finance. Safe havens may be questioned, but they are not easily replaced. Instead, investors will increasingly consider them conditionally safe, sound under most circumstances, yet not entirely immune to political risk.
If we are not dismantling the system, then geopolitics is sure reformulating how capital is allocated. This is most evident in cases like the return of industrial policy in industrialised economies. National security concerns are even further connected to macro-level fiscal programmes. That is influencing private capital flows, as investors align with policy priorities or react to incentives embedded in legislation.

The effect is subtle but significant: capital is no longer flowing solely to where returns are highest, but also to where political support and strategic importance are greatest. Asset managers are also tasked with navigating not just macroeconomic cycles, but also policy regimes that are potentially sensitive to geopolitical developments. Now, longer-term strategies are requiring greater consideration of regulation, political alignment and vulnerability to cross-border tensions.

A more complex calculus
Complexity is the defining feature of the current environment. Financial decisions once guided predominantly by growth differentials, interest rates and inflation expectations must now also account more explicitly for political risk. This is not entirely new. Capital flows have always been guided by influences beyond merely economic fundamentals, including regulatory arrangements, institutional credibility, and geopolitical alliances. What has changed is the salience of these considerations. The problem is especially acute in emerging markets. Many have developed deep reserve buffers in the past 20 years, which have protected them from external shocks. Yet exposure to major financial centres – especially the US – remains a defining feature of the global system.

This can cause unexpected vulnerabilities. Economies heavily invested in US assets may face greater risks from currency movements than from geopolitical fragmentation. The interplay between financial exposure and political alignment is, in other words, highly context-specific. However, smaller, more vulnerable economies have different risks. Limited access to global capital markets, in addition to their exposure to commodity price shocks and currency volatility, makes them especially vulnerable to disruptions caused by geopolitical developments elsewhere.

The financial system is neither collapsing nor being entirely remade by geopolitics. But its character is evolving. The notion of neutrality – the idea that financial infrastructure has an autonomous relation to political power – is beginning to dwindle. Instead, it is a more explicit acknowledgement that access to capital, payments systems, and reserve assets can be governed by strategic considerations. To investors and policymakers these new frameworks do not mean relinquishing the old ones. Yield, liquidity and risk-adjusted return remain central. But they must now be assessed alongside a more explicit evaluation of geopolitical exposure. The world may be entering a period defined less by global integration and more by competing systems of economic, political and financial influence. The result is a world in which financial strategy and political strategy are increasingly intertwined. Navigating it will require not just economic insight, but a sophisticated understanding of how power is exercised through markets. In that sense, the question is no longer whether finance is becoming geopolitical. It is how deeply that reality will be embedded and how adeptly global actors can adapt to it.