Alder urges cross-border oversight of shared financial risks

Alder said regulation remains organized by firm, sector and jurisdiction while risks travel across those boundaries through shared dependencies.

Supporting growth must not mean weakening resilience, he said.

The FCA, Bank of England and Prudential Regulation Authority have developed a Critical Third Parties Regime covering major cloud providers.

It gives UK financial regulators powers to test crucial services outside the financial sector, without treating suppliers as financial firms.

Alder also questioned whether AI models, data providers and social media platforms require closer oversight.

He urged cross-border intelligence sharing, joint crisis exercises and legal gateways, data-sharing standards and protocols enabling coordinated action.

The 2024 CrowdStrike outage grounded more than 10,000 flights and cost US Fortune 500 companies an estimated $5.4 billion, despite affecting fewer than 1 percent of Windows devices.

Alder also cited US Treasury data showing homeowners in the highest-risk 20 percent of areas paid 82 percent more for insurance than those in the lowest-risk 20 percent.

Reduced coverage can affect property values, mortgages and credit portfolios.

He said 9 of California's 10 largest wildfires occurred in the last decade, while the UK recorded its hottest summer.