FT News Briefing Alarm bells over US lending standards
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Sep 25, 2025 BNP Paribas is changing its tune by dropping its controversial weapons financing ban, opening up new opportunities. Meanwhile, US investors are sounding alarms over lax lending standards, pointing to recent defaults that highlight major concerns in credit markets. Italy is considering a freeze on its retirement age, a move that could have significant effects. On the gold front, Singapore and Hong Kong are vying to become leading gold hubs, driven by rising demand, despite facing geopolitical challenges.
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Bank Drops Controversial-Weapons Pledge
- BNP Paribas removed a long-standing restriction on financing “controversial weapons” to expand defense work.
- European rearmament and banks' desire to capture weapons-industry business drove the policy change.
Asset-Backed Defaults Raise Red Flags
- Sudden collapses of Tricolor and First Brands expose vulnerabilities in asset-backed lending markets.
- These failures raise investor doubts about due diligence and controls among non-bank lenders and securitisation sponsors.
Two Different Asset-Backed Models
- Tricolor made auto loans secured by cars to southern US customers, so loans had physical collateral.
- First Brands used factoring, selling invoices tied to customers like AutoZone, shifting risk to lenders tied to those buyers.