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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The writer is US Deputy National Security Adviser for Cyber and Emerging Technology

Ransomware is wreaking havoc around the world. Earlier this year an attack against a US health insurance giant shut down operations at hospitals and pharmacies for weeks, costing the company a reported $872mn. This does not include the $22mn ransom payment that the company made to a Russia-based gang. On the other side of the world, a ransomware attack shut down the Port of Nagoya — Japan’s busiest port — for two full days.

These cases exemplify the thousands of attacks that are taking place around the world. The contours of battle continue to expand. Companies, from small businesses and auto dealers to hospitals and other critical infrastructure such as ports and water systems, are all coming under threat. Since 2021, the US government alone has identified more than 4,900 ransomware attacks with at least $3.1bn paid out in ransoms.

Not only is this money that could otherwise be spent on salaries, taxes and business development but it is money that is going directly into the hands of criminal enterprises and rogue states. 

If ransomware is a cash cow, cryptocurrencies are its grazing pastures. According to the Financial Action Task Force, most jurisdictions do not comply with international standards for virtual assets. Russia is especially concerning, operating as a safe haven for both ransomware attackers and money laundering crypto exchanges like Bitzlato, Garantex, and PM2BTC. The Russian government has applied pressure to prevent the extradition of cyber criminals apprehended overseas.

Ransomware attacks are also one of the most profitable forms of cyber crime in North Korea’s repertoire. When combined with cyber attacks against cryptocurrency platforms and infrastructure, they form a source of overseas revenue that evades international sanctions and generates more than $3bn.

Addressing these threats requires co-operation via global partnerships. This week, the White House convened 68 member countries, international organisations, and industry leaders for the fourth annual Counter Ransomware Initiative conference in order to explore novel approaches to the problem. 

This organisation has become the most effective and largest international cyber partnership, with members from every corner of the globe. As part of it, the US is launching a fund, comprising industry and member contributions, that will strengthen cyber security capabilities via joint assistance in the wake of a cyber attack. It will provide targeted support to improve skills, policies and response procedures. 

We in the US are clear-eyed about the enormous scope of this challenge, and the hard work ahead. Enhanced co-operation within government and between countries, civil society and private industry is a critical first step; but we will also need companies to step up and play their part in the boardroom. 

The White House has identified a small set of practices, including maintaining and testing backups, encrypting data and deploying network monitoring and multi-factor authentication, that have an outsized impact on the risk of a successful ransomware attack, and the prospects for containing one. Chief executives and corporate boards should codify and implement them immediately, for the health of their own enterprises and their national economies. This is especially true of companies with a nexus to critical services, such as healthcare, whose disruptions can have severe impacts on communities and vulnerable people.

The insurance industry can also play a constructive role, by, among other thing, requiring and verifying implementation of effective cyber security measures as a condition of underwriting its policies, akin to the way fire alarm systems are required for home insurance. Some insurance company policies — for example covering reimbursement of ransomware payments — incentivise payment of ransoms that fuel cyber crime ecosystems. This is a troubling practice that must end. 

The scourge of ransomware will not end on its own. Cybersecurity must improve, as countries around the world unite to disrupt ransomware actors and pressure safe haven jurisdictions to take action to stem this destabilising activity. As the battleground shifts, so must our defences. Criminal activity crosses borders and targets public and private sectors in every country. Our solution must do the same.

Good morning and welcome to your Morning Briefing for Friday 4 October 2024. To get this in your inbox every morning click here.

FCA’s advice guidance boundary review ‘is a huge mistake’

While realising I am probably in the minority in this industry, I fear the Financial Conduct Authority is about to score a major own goal that will have dire consequences, writes Ian Mckenna, founder of FTRC.

Changing the advice guidance boundary will cause a huge dilution of consumer protection. It will make it easier for manufacturers and others to sell products without advice, avoiding the inconvenience of being responsible for the consequences of their actions.

This risks setting consumer protection back decades. I passionately believe the advice guidance boundary is in the right place. Now is exactly the wrong time to change it.

Solving ‘vacuum’ caused by cost disclosure rule removal

The recent announcement by the Treasury and the FCA that it will temporarily ban the “double counting of costs” for investment trusts was welcomed by the sector.

However, the immediate removal of the requirement to provide costs disclosures has left a “potential vacuum”, according to Abrdn.

The company has released a ‘Statement of Operating Expenses’ (SOE) template as an interim measure to deal with this issue.

The new template document is for disclosing expenses incurred by investment trusts.

Honesty is key to staff retention

Being honest with your employees is key to staff retention, Cairn Independent operations director Laura Young has insisted.

She was responding to an audience question about the best way to keep people within advice businesses at the Lang Cat’s HomeGame 4 event in Edinburgh yesterday (3 October).

“In terms of retaining the team, the only constant is change,” Young said.

“People’s needs and wants evolve, and what they initially say they want might not be the same as what they desire by the end of the process.”

Quote Of The Day

No one seems to be talking about inflation anymore, and that could be a mistake. While attention is on the ECB and the Fed, investors ought to look more closely at developments in China.

-Eric Vanraes, head of fixed income at Eric Sturdza Investments, says the ECB’s policy of monetary easing risks allowing recession to take hold.

In Other News

Bupa has launched its health and wellbeing subscription service, Bupa Well+ Silver, to UK consumers. It provides fast access to affordable digital healthcare services.

The Silver tier subscription service follows the launch of Bupa’s GP subscription service – the Bronze tier in Bupa’s Well+ portfolio, in June.

Alongside the access to digital GP and nurse appointments, customers with Bupa Well+ Silver will be able to book digital consultations with physiotherapists and mental health specialists, starting from £20 per month.

Customers will also be able to use digital wellness services including gym classes and wellbeing programmes like guided meditation.

Sacker & Partners LLP has announced that Andy Lewis will be joining the firm as a partner.

Lewis joins the specialist law firm for pensions and retirement savings from Travers Smith.

He is well known in the industry as an ESG, sustainability and productive investment expert and is also a strong supporter of EDI initiatives. He trained and qualified at Hogan Lovells before moving to Travers Smith where he became a partner in 2019.

David Saunders, senior partner at Sackers, said: “Andy is a highly regarded pensions lawyer in the DB and DC space, with extensive experience of advising the trustees and sponsors of large pension funds. He is a perfect fit for Sackers, and we are delighted he approached us.”

Pension funds rethink hedging tactics after UK crisis (Reuters)

Italy seeks to raise more windfall taxes from companies (Financial Times)

Carmakers dangle £2bn in EV discounts to boost UK sales (Bloomberg)

Did You See?

The cost-of-living-crisis is the single biggest driver of people seeking financial advice or guidance, a new report from St James’s Place (SJP) has found.

Major life events or milestones are the biggest prompts for people to seek financial advice or guidance, SJP’s Real Life Advice Report shows.

Almost half (48%) of those who have accessed advice or guidance – 12.5m people – did so following a key moment.

This includes buying a property, getting married, or dealing with an unexpected change like divorce.

My personal style signifier is my jewellery, which is somewhere between Sammy Davis Jr and Mr T. I have a pile of ivory bracelets that I bought when I was in Africa in the ’70s. And I have a combination of clamshell beads called wampum that were tender under Native Americans here in Martha’s Vineyard. On my other wrist I have five gold bracelets made by my mother, who became a jeweller at 70, and today I’m wearing a coral necklace. Most of my jewellery comes with history; I collect stories.

The last thing I bought and loved was a piece of blackamoor jewellery, which I know is very controversial these days. It’s an ebony and ivory head of a man, a watch seal, who has been done so delicately and – I think – with love. There are historians who might differ with me, but I’m going with my story. To me, it presents a kind of regalness and dignity.

The place that means a lot to me is where I am now in Martha’s Vineyard, in a house my parents bought when I was nine years old; I have one friend I’ve seen every summer since. I call it my watermelon house, and I have a stained-glass watermelon piece I commissioned a local artist to make. I’m in Oak Bluffs, which has been a summering spot for African-Americans for more than 100 years. It’s my happy place.

My tastes were arrested in the third grade, so I like gummy bears. My dentist loves me

On my Instagram “For You” page you’ll find all kinds of strange things: cat videos (I’ve had Siamese cats most of my adult life), food videos and, for some bizarre reason, Nigerian weddings. Then I get all of the strange animals: Brindabella the wombat; the newly adopted elephant at the shelter; and a strange bald parrot who shows up periodically. @drjessicabharris

One of the best books I’ve read in the past year was from my favourite shop here, Portobello Road. I found a first edition of Giovanni’s Room by James Baldwin, who was born 100 years ago: I had the honour of knowing him. It’s part of the LGBTQ+ canon, it’s part of the African-American canon – and it’s certainly part of the American canon. Something that brings all three of those things together is sorely needed at this point in time.

In my fridge you’ll always find wine – pinot noir or burgundy – butter, salad greens, bacon and too many condiments: chutney, pickles and all of that, which makes for a very full fridge. They live in the back and make their way forward, usually in time to be thrown out. 

My style icon is a composite of folks. Diana Vreeland, bizarrely: she wasn’t a beautiful woman, but she understood style; Schiaparelli would also come under that heading. I like the jewellery style and something of the personal style of Millicent Rogers. And, of course, Josephine Baker goes without saying.

The best gifts I’ve given are food or alcohol – lots of bottles of wine, and recently a nice Calvados. Many of my friends are my age, so they don’t need another thing to dust. And they have their own personal style, so I don’t want to buy them something I think is gorgeous but they’re going to look at and go, “Hmm.”

And the best gift I’ve received recently is about 14 pounds’ worth of fish from The Martha’s Vineyard Fishermen’s Preservation Trust, all iced down, scaled and gutted. On the Vineyard it’s what we call scup; in other parts of the US, it’s called porgy. I’m going to distribute some of it to friends; some of it I’m going to freeze; and some of it I’m going to eat fairly immediately: an old-fashioned fish fry or steamed with ginger, scallions and a drizzle of soy sauce.

The last item of clothing I added to my wardrobe was part of my addiction to Hermès cashmere and silk scarves. My favourite one is by Kermit Oliver who, to my knowledge, is the only African‑American artist to have designed scarves for Hermès. He used traditional American themes – this one is of Native American dancers – and they’re lovely. 

The last music I downloaded was “Put a Woman in Charge” by Keb’ Mo’, featuring Rosanne Cash. It’s a wonderful song. And it’s really – what should we say? – appropriate right now. 

I have a collection of arcane antique tableware: a Victorian fish slice and fork from Blarney Castle in Ireland; grape scissors; fruit forks and knives. If it collects dust, I collect it. My favourite thing is what the French call a manche à gigot: a handle that goes over the bone of a leg of lamb so you can slice the meat against the grain. I haven’t done a lot of entertaining recently because I’ve been too busy working and crazy, but I like setting a table.

I don’t know if I believe in life after death. I kind of do, but it’s kind of “Up in the Air, Junior Birdmen”, touchy-feely. I mean, I’ve met people I know who I’ve never met. So there’s some kind of spiritual something going on there.

An indulgence I would never forgo is caviar. I like Sevruga because I can’t afford Beluga. It’s my New Year’s ritual: I buy as much as I can afford, and as the clock strikes midnight, I spoon it in. I don’t worry about blinis or crackers or anything like that. It’s the way I pamper myself. 

The best way to spend $20 is on candy. My tastes were arrested in the third grade, so I like gummy bears, wine gums and liquorice allsorts – all that kind of stuff. My dentist loves me. 

My favourite room in my house is my living room. I have a chair I call “Command Central” where I spend most of my day writing. My computers are in a box next to it and there’s ginormous pile of books that I periodically have to cull.

The artist whose work I would collect if I could is Romare Bearden, an African-American artist who did a lot of collage. I’ve been thinking about trying to buy one: it’s in the realm of possibility, but not immediate reality. In the realm of total impossibility are Goya or Toulouse-Lautrec; I like the theatricality of their works. 

The beauty staple I’m never without is perfume. I’m not a make-up wearer, but I love fragrance. Right now I’m wearing Diptyque’s citronelle and geranium scent, which is supposed to repel mosquitoes; L’Artisan Parfumeur’s Tenebrae; and Hermès’ Eau de Pamplemousse Rose. Artisan Parfumeur Tenebrae, £205 for 75ml. Diptyque Citronnelle & Geranium Body Spray, £48 for 100ml. Hermès’ Eau de Pamplemousse Rose, £100 for 100ml

My favourite website is Wordle. I’ve also discovered, to my surprise, that there is a French version: Le Mot. I always start out with the same word, so unless “adieu” is the word, I’m not going to get it in one. I’m one of those down-to-six-letters kind of people.

The things I couldn’t do without are friends. As an only child, they’re what sustains me. We sit and talk; we eat together. All of it. But sometimes it doesn’t necessarily require conversation. It may just require presence. 

The best souvenirs I’ve brought home – if we take “a souvenir” in the French form of the word, meaning a memory – are times in Paris with my French family. As a student in college I did a year abroad and I lived with a family of 38. It was a very different and wonderful experience. I lost touch with them, but I went back after 20 years and we reconnected. Now I go to Paris every year in January and on my last night I have dinner with my French family at Brasserie Lipp.

A way to make me laugh is wordplay – sometimes it’s an awful pun, sometimes it’s just a great turn of phrase. Recently I saw the film Thelma, where the heroine is played by a 96-year-old actress. It’s the first time I’ve consciously laughed out loud in a long time: there’s one scene where they talk about what she does during the day, and it’s her putting pills into her pill container. The older you get, the more it will resonate.

In another life, I would be doing something closer to what I’m doing now. I was a college teacher for 50 years; writing was what the kids call a side hustle. Getting around to being a writer has been a big switch for me. On my Instagram page it says, “enjoying a retirement renaissance”. That pretty much sums it up.

I am inspired by just about everything. Honestly, I’m an idea generator. I just want enough time to take care of all of them! 

The best bit of advice I ever received takes us back to Baldwin. I remember him saying, “Step out on the water. Who knows, you may find out you can walk on it.” I think that’s incredibly encouraging and kind of wonderful.  

A Kwanzaa Keepsake and Cookbook: Celebrating the Holiday with Family, Community, and Tradition by Jessica B Harris is published by Scribner on 5 November