This week, Ajman Bank priced its first-ever AT1 capital securities, and Commercial Bank of Dubai upsized its own deal on strong demand. In Brazil, five private banks are reportedly withholding their signatures on a state-bank rescue deal until two public banks post their own. The same week, the OCC advanced stablecoin trust bank charters for both Circle and Sony Bank, and the Netherlands' central bank fined ABN AMRO EUR 8.5 million ($9.7 million) over AML gaps. Read more on the week's key developments. 1. OCC clears two stablecoin trust bank charters Sony Bank disclosed on 6 July that the Office of the Comptroller of the Currency (OCC) had granted preliminary conditional approval for Connectia Trust, N.A., its US subsidiary, to operate as a national trust bank focused on dollar-denominated stablecoin issuance. Four days later, on 10 July, the OCC granted Circle Internet Group final approval to open First National Digital Currency Bank, N.A., operating as Circle National Trust, converting the conditional approval Circle received in December 2025. Circle becomes the first stablecoin issuer to hold a final US national trust bank charter, for USDC, the world's largest regulated stablecoin. A national trust charter carries no deposit-taking or lending powers, but brings direct OCC supervision. Both charters arrive before the GENIUS Act's implementing rules are finished. Six federal agencies must finalise those rules by 18 July, and as of this week none had done so. 2. Fed moves to align its AML supervision with April's risk-based standard The Federal Reserve Board voted 6 to 1 on 6 July to approve a proposal amending its bank AML programme requirements, publishing it on 7 July. The proposal is designed to align with changes the FDIC, OCC and National Credit Union Administration proposed in April, and a parallel FinCEN proposal from the same month. It would direct banks to allocate AML resources by risk and would have the Fed focus enforcement on "significant" or "systemic" programme failures instead of isolated gaps. Governor Michael Barr, who supports risk-based AML supervision in principle, cast the lone dissenting vote. His objection targets the undefined "significant or systemic" threshold specifically, which he warned could limit the Board's ability to substantiate that a bank is actually maintaining a compliant programme. 3. Bowman urges risk-based, proportionate supervision of banks’ AI use Federal Reserve Vice Chair for Supervision Michelle Bowman told a Financial Stability Board outreach event on 7 July that supervisors should calibrate AI oversight to how a tool is actually used and whether that use is material. The mere fact that AI is involved should not itself trigger closer scrutiny, she said. She argued lower-risk uses of AI deserve a lighter supervisory touch, and that governance standards built for large institutions running complex AI applications don't automatically fit smaller institutions using simpler tools. The event gathered feedback on the FSB's consultation report, "Sound Practices for Responsible Adoption of Artificial Intelligence," published 10 June. The FSB is accepting written responses until 22 July. 4. Gulf banks' AT1 deals draw strong demand, signalling deep investor appetite for GCC bank capital Two Gulf banks tapped the Additional Tier 1 market within a day of each other this week, both on strong demand. Ajman Bank, the UAE Islamic lender rated BBB+ by Fitch, priced its debut capital securities transaction on 8 July, a $300 million unrated Reg S perpetual non-call 5.5-year sukuk at a profit rate of 6.5%, its first venture into loss-absorbing instruments. Commercial Bank of Dubai, rated Baa1 by Moody's and A- by Fitch, followed on 8 July with an upsized $550 million perpetual non-call six-year AT1 at a 6.625% coupon, after its order book peaked at $825 million against a $500 million launch size. The scale of demand, and Ajman Bank's debut in loss-absorbing instruments, points to investors treating GCC bank capital as a viable bet. The top 45 GCC banks carried an average Tier 1 ratio of roughly 17% in 2025, alongside low NPLs and strong provisioning coverage, according to S&P. 5. Reported impasse threatens Brazil’s BRB rescue deal Brazilian media have reported that five private banks in the BRB rescue guarantee group, Itaú, Santander, Bradesco, BTG Pactual and XP, have not yet signed the agreement. The reports say the banks disagree with state-owned Banco do Brasil and Caixa over how to share the risk. The same reports say Banco do Brasil and Caixa believe the risk belongs to BRB, which bought the bad loans at the centre of the crisis, and to the private banks that sold Banco Master's collapsed certificates of deposit. The rescue's basic structure is on the record. A BRL 6.6 billion ($1.29 billion) loan for Banco de Brasília was brokered by Supreme Court Justice Luiz Fux on 28 May. It avoids the federal budget by routing through deposit-guarantee fund FGC, backed by the Federal District's own BRL 1.5 billion ($293.6 million) counter-guarantee. The deadline has already slipped once, from 20 June to 31 July, and BRB's president estimates the balance-sheet hole at roughly BRL 8.8 billion ($1.72 billion). If the disagreement is not resolved, the question is who ultimately carries the risk in a rescue built to keep the government out of it. 6. Netherlands’ central bank fines ABN AMRO EUR 8.5 million over AML gaps De Nederlandsche Bank (DNB) fined ABN AMRO EUR 8.5 million ($9.7 million) on 9 July for structural shortcomings in the bank's execution of customer due diligence on part of its high-risk customer base. DNB's findings covered files examined for the period from 20 September 2023 to 9 September 2024. ABN AMRO accepted the fine without contest, stating in its own press release that it did not meet the standards expected of it in safeguarding the integrity of the financial system in the files DNB examined. The fine lands squarely inside the period following ABN AMRO's much larger 2021 settlement with the Dutch Public Prosecution Service, in which the bank agreed to pay EUR 480 million ($583 million), comprising a EUR 300 million ($364 million) fine plus EUR 180 million ($219 million) in disgorgement, for shortcomings in its client acceptance, transaction monitoring and client-exit processes between 2014 and 2020. 7. Banque de France's Beau proposes scrapping systemic risk buffer, aligning resolution rules with Total Loss-Absorbing Capacity standard Denis Beau, First Deputy Governor of the Banque de France and designated chair of the Autorité de Contrôle Prudentiel et de Résolution (ACPR), said in an interview published 6 July that Europe's systemic risk buffer should be eliminated in favour of a single releasable buffer covering both cyclical and structural risks. Beau, who has sat on the Single Supervisory Mechanism's supervisory board for nine years, said the change would not reduce authorities' firepower, since both risk types would remain covered, and could make buffers easier to deploy and release. He also proposed better aligning Europe's Minimum Requirement for Own Funds and Eligible Liabilities (MREL) with the international Total Loss-Absorbing Capacity (TLAC) standard. Beau framed the changes as simplification rather than deregulation, distinguishing the two by whether resilience built up through COVID-19, the Silicon Valley Bank collapse, the war in Ukraine and recent inflation is undermined. He said the reform push reflects an ongoing European and international effort to modernise supervision, alongside a separate European Commission report expected to address bank competitiveness. 8. ISDA backs RBI's counterparty credit risk overhaul International Swaps and Derivatives Association (ISDA) submitted its formal response to the Reserve Bank of India's draft amendment directions on the Standardised Approach for Counterparty Credit Risk (SA-CCR) on 1 July and published the letter on its own website on 8 July. The association broadly welcomed the change, saying India's approach closely follows international standards set by the Basel Committee. It also flagged five specific technical points it wants adjusted. These include the 1.4 alpha factor (the multiplier banks must apply on top of their own exposure calculations), the legal-opinion requirement for central counterparty (CCP) trade exposures and a portability criterion it says unfairly penalises CCPs with no default history. 9. Chinese banks list bulk NPL packages at the Banking Credit Asset Registration and Transfer Centre This week, major Chinese banks including Bank of China, Bank of Communications, China Merchants Bank, Ping An Bank and Zhongyuan Bank bulk-listed batches of NPLs at the Banking Credit Asset Registration and Transfer Centre, the platform through which Chinese banks transfer bad debt to asset management companies and other buyers. The packages are concentrated in retail and corporate credit that has sat on banks' books for a long time. China's personal-loan NPL transfer pilot, first launched in January 2021, has been extended through 31 December 2026, with fee waivers in place specifically to encourage banks to move bad debt off their books. Selling these loans in bulk, even at a steep discount to face value, lowers a bank's headline NPL ratio and frees the capital held against them for new lending. 10. Bangladesh's United Commercial Bank to raise BDT 775 crore ($62.7 million) via rights issue after capital ratio breaches Basel III floor United Commercial Bank (UCB) will raise BDT 775 crore ($62.7 million) through a rights issue after its capital-to-risk-weighted-assets ratio fell to 8.42% at the end of 2025, from 10.59% a year earlier, below the 10% minimum required under Basel III. The Bangladesh Securities and Exchange Commission approved the proposal on 7 July, chaired by BSEC Chairman Masud Khan. UCB will offer one new share for every two held, issuing 77.51 crore new shares at a face value of BDT 10 ($0.08), above the current market price of BDT 9 ($0.07), fully underwritten by the merchant banking arms of Dhaka Bank, Al-Arafah Islami Bank and Rupali Bank. UCB reported a capital shortfall of BDT 2,659 crore ($215.3 million) at the end of 2025, with its non-performing loan ratio rising to 15.50% of total loans, from 14.90% a year earlier. Paid-up capital will rise from BDT 1,550 crore ($125.4 million) to more than BDT 2,000 crore ($161.8 million) once the issue completes. A rival brokerage's chief executive warned that pricing above market value could push subscription onto the underwriters rather than existing shareholders, several of whom have weak balance sheets of their own. The Risk and Capital Weekly Brief is a regular round-up of developments in risk and capital management, highlighting institutional practices shaping resilience.
