Become more informed in minutes...

New joint guidance from the Federal Reserve and Office of the Comptroller of the Currency on model risk management has removed generative and agentic artificial intelligence (AI) from its scope, creating greater flexibility for banks but leaving significant questions around governance, accountability, and risk management unanswered. The updated guidance, which replaces the long-standing SR 11-7 framework introduced after the 2008 financial crisis, acknowledges that generative and agentic AI technologies are evolving too rapidly to fit within existing model risk standards. While banking groups have welcomed the move as reducing barriers to innovation, experts warn that regulators have not provided a replacement framework, leaving institutions responsible for developing their own controls, monitoring processes, and accountability structures. Risks include cascading errors across multiple AI systems, unclear ownership of decisions, potential regulatory breaches, and increasing legal exposure.

 

American Banker

The power of AI in finance

New research shows how finance teams are achieving the greatest gains from using AI. What impact can AI have on your team? Register for our webinar to find out:  

• How finance teams use AI today
  
• Where AI has the greatest impact on financial operations
  
• How to overcome barriers to AI adoption
  
• What's next for AI in finance

Hear how finance teams can achieve real results using AI.  

Register Now

 

Amazon has shut down an internal artificial intelligence usage leaderboard after employees sought to improve their rankings by generating unnecessary AI activity, highlighting the unintended consequences of incentivizing AI adoption.

 

Financial Times

Roughly a quarter of American professionals experience a midcareer stall, going at least five years without a meaningful raise or promotion before peak earning years. Research by the Burning Glass Institute and NYU’s School of Professional Studies tracked 1.3m careers and found early momentum matters: stalled workers averaged 30% wage growth in their first decade, versus 71% for those who kept advancing. Matt Sigelman of Burning Glass said: “You’re not talking about a niche problem”. Hiring slowdowns and managerial layoffs have reduced upward mobility, while strategic skills, nondegree credentials and adjacent pivots can lower stall risk. Public administration showed the highest stall rate, and workers are increasingly seeking certifications, fundraising experience or side careers to improve prospects and earnings resilience.

 

Wall Street Journal

Business activity in the Chicago region surged in May, with the Chicago Business Barometer climbing to 62.7 from 49.2 in April, marking its strongest reading since January 2022 and far exceeding economists’ expectations of 50.8. The sharp improvement signaled a return to expansion and was driven by significant gains in new orders, production, order backlogs, and supplier deliveries. New orders rose to their highest level since January 2022, while production reached its strongest level since July 2021 and remained in expansion territory for a fifth consecutive month. Employment declined modestly, partially offsetting the broader gains. Meanwhile, the prices paid index increased to its highest level since May 2022, with businesses citing higher oil prices and transportation fuel surcharges as key cost pressures.

 

RTT News

Wall Street Journal

The U.S. merchandise-trade deficit narrowed in April as exports rose faster than imports, supported by stronger shipments of capital goods, consumer products, and industrial supplies such as crude oil and petroleum products. The Commerce Department said the goods-trade shortfall fell 3.4% from the prior month to $82.4bn, below economists’ expectations for an $87bn deficit. Exports increased 4%, while imports rose 1.9%, including a record 40.1% year-over-year jump in capital goods imports as companies continued investing in AI-related equipment and building inventories against supply-chain risks. Retail inventories rose 0.7%, wholesale stockpiles increased 0.5%, and US energy exports hit a record of more than 6.4m barrels a day amid disruptions to Middle East oil trade.

 

Bloomberg

Reuters

U.S.-based tax advisory firm Ryan has agreed to acquire European tax specialist Svalner Atlas in a deal valued at approximately $400m, strengthening its position as an independent challenger to the Big Four accounting firms across Europe. The acquisition pre-empted a planned auction process and will add more than 450 professionals and over $120m of annual revenue to Ryan’s growing European operations. The deal reflects increasing consolidation within the professional services sector as firms backed by private capital seek to build alternatives to Deloitte, EY, KPMG, and PwC. Ryan, which generates around $1.7bn in annual global revenue, has completed six European acquisitions in the past year, lifting regional revenue to approximately $200m. The company plans to continue expanding its tax advisory capabilities as demand rises for specialist tax, regulatory, and cross-border advisory services amid increasingly complex international tax rules.

 

Bloomberg

Financial Times

In the face of escalating cybersecurity threats, accounting firms are increasingly turning to SOC as a Service for robust protection. This managed security solution offers comprehensive threat defense, allowing firms to outsource their data security needs. As Dr. Sangeeta Chhabra, co-founder of Ace Cloud Hosting, emphasizes, "Accounting firms that invest in proactive cybersecurity strategies will be far better positioned to protect their operations." With the rise of artificial intelligence (AI) and personalized attacks, traditional security measures are no longer sufficient. The potential reputational damage from data breaches can be devastating, leading to a loss of client trust. Additionally, the shift to hybrid work models has introduced new vulnerabilities, making 24/7 monitoring essential. Compliance with regulations like GDPR is also critical, as noncompliance can result in hefty fines. Ultimately, SOC as a Service allows firms to focus on their core business while enhancing their cybersecurity posture.

 

Accounting Today

PwC says the global private credit fund industry is projected to grow from $2tn in assets under management to $3.4tn by 2030, despite mounting competition, economic headwinds, and rising compliance costs. The survey found that more than 80% of portfolio managers expect increased allocations over the next 12 months, with 44% forecasting growth of more than 20%. According to PwC’s Global Private Credit Fund Survey 2026, two-thirds of respondents identified intensifying competition as the main factor affecting performance this year, followed by concerns over credit defaults and losses. However, more than half of managers said they were only slightly concerned, or not concerned at all, about rising defaults over the next one to two years. Managers expect the greatest stress in consumer and retail, automotive, hospitality and leisure, and technology sectors. The report also highlighted growing use of technology across private credit portfolios, although adoption remains uneven. More than half of respondents said they are increasing technology implementation, while AI is currently viewed as most useful in underwriting rather than portfolio management.

 

Wealth Briefing

Two key AICPA committees have released proposed strategic plans covering 2027–2030 and are seeking stakeholder feedback through August 31st. The Peer Review Board (PRB), which oversees the AICPA Peer Review Program, and the Professional Ethics Executive Committee (PEEC), the organization’s senior ethics body responsible for the Code of Professional Conduct, have each published consultation papers outlining their proposed priorities for the next three years. Both proposals include seven consultation questions designed to gather feedback from members and other interested parties. Comments on the PRB plan can be submitted via an online survey or email, while feedback on the PEEC plan can be sent directly to the committee’s exposure draft email address. The consultation process forms part of the AICPA’s efforts to shape future priorities for audit quality, peer review, ethics, and professional conduct across the accounting profession.

 

Journal of Accountancy

Former PCAOB member Christina Ho has joined newly launched accounting firm Oath as chief assurance officer, helping lead a venture-backed effort to modernize auditing through artificial intelligence. Oath aims to automate 80% of its audit and advisory work by 2030 using AI-powered systems that connect directly to client data sources and continuously verify financial information. The firm, which recently received its CPA license and will initially serve private companies, plans to maintain human oversight while shifting much of the routine audit process to machine-driven workflows. Backed by $6.6m in seed funding, Oath is also recruiting “accounting engineers” with expertise in both accounting and technology. Ms. Ho, a frequent dissenter during her tenure at the PCAOB and a critic of regulatory barriers to innovation, said the startup’s vision aligns closely with her belief that the future of auditing requires a technology-first approach rather than traditional, labor-intensive methods.

 

Wall Street Journal

Canada has lost its long-standing corporate tax advantage over the United States, according to the Canadian Forum for Financial Markets, which is urging Ottawa to introduce tax cuts, banking reforms, and retirement savings changes ahead of the next federal budget. In a pre-budget submission to the House of Commons Finance Committee, the group proposed reducing Canada’s federal corporate tax rate from 15% to 13% over two years beginning in 2027. The organization said Canada’s combined federal-provincial corporate tax rate now averages 25.98%, nearly matching the US rate of 25.57%, compared with a 12.3 percentage-point advantage Canada held in 2017. The group also called for sweeping personal income tax reforms, including compressing five federal tax brackets into three, lowering several marginal rates, and offsetting lost revenue by raising the GST from 5% back to 7% over two years.

 

Wealth Professional

The European Commission is preparing a package of tax simplification measures aimed at reducing administrative burdens on businesses and cutting compliance costs by an estimated €7bn annually. The proposals include broader withholding tax exemptions, a new E.U.-wide research and development tax allowance, simplified access to tax reliefs through self-assessment, and exemptions for certain companies from parts of the bloc’s anti-tax avoidance framework. The reforms are intended to make tax compliance easier while supporting investment, innovation, and cross-border business activity. The Commission argues that although existing E.U. tax rules have helped reduce tax avoidance, their growing complexity has increased costs for both businesses and tax authorities. The proposals also include relief for the defense sector on borrowing costs and exemptions from controlled foreign company rules for large businesses already subject to the OECD-backed global minimum tax regime. The package is due to be presented on June 24th, after which E.U. member states will negotiate and must unanimously approve any final legislation.

 

Bloomberg