Italy moved to ban lab-grown meat last week to protect its food heritage. This week the Italian privacy regulator has banned ChatGPT. The regulator cited privacy concerns, but could it again be for a cultural reason? Perhaps they just couldn't figure out how to make it speak with its hands. 🇮🇹🤌

The lowdown

• 🚫 Italian privacy regulator bans popular AI tool ChatGPT.

• 🛢️ OPEC+ takes markets by surprise with oil output cuts leading to increase in the price of oil.

• 🤼‍♀️ UFC owner Endeavor in final talks to acquire wrestling entertainment company WWE.

Flex your finance muscle

Shadow banks

The potential crisis in commercial real estate ($) is likely to bring greater scrutiny to the highly leveraged empires built by shadow banks, but what are they?

A shadow bank is a financial intermediary that operates outside the traditional, regulated banking system. These entities engage in credit intermediation, liquidity transformation, and maturity transformation, much like traditional banks. However, they do not have access to central bank funding or safety nets like deposit insurance, and they are subject to different (and often lighter) regulatory frameworks. We are mainly talking hedge funds and PE but there are others.

Shadow banks can play an important role in the financial system by providing alternative sources of funding, promoting competition, and offering innovative financial products. But, and it may end up being a big but, they also pose risks, as their activities can contribute to systemic vulnerabilities, financial instability, and contagion, especially during periods of economic stress. Since they are not as heavily regulated as traditional banks, they may engage in riskier lending practices or maintain lower capital buffers, which can amplify financial shocks. Stay tuned.

Featured stories

Allied Universal halts IPO plans

The market for IPOs is sluggish at the moment – the first quarter of 2023 saw a 66% YOY decrease in the value of IPOs, and it doesn’t look like things are picking up.

The world's largest private security group Allied Universal announced it will halt its multibillion-dollar IPO due to challenges in hiring and volatile markets. The company is the world’s seventh largest employer, so a tight labor market impacts the company more than most.

The company had previously said a US listing was possible by May 2024. Analysts estimate Allied Universal's enterprise value to be between $15 billion and $17 billion. This is down on the $20 billion figure thrown around when the company attracted the interest of a SPAC in early 2022. For now, at least, the private security group will stay private.

The content we're consuming today

• The Economist: The market for Picassos may be about to turn ($).

• The EY CFO Agenda: Why tax governance is key in an era of more tax risk and controversy.

• Bloomberg: How a Midwestern Insurance Salesman Cornered the Classic Car Market ($).

Off-balance sheet items

• Something a little different from the FT with this mini film about: North Korea and the triads: gangsters, ghost ships and spies. (Watch it once you have finished watching the latest episode of Succession.)

The bottom line