On 22 October 2025, Nikhil Rathi, chief executive of the Financial Conduct Authority, gave a speech at the Corporation of the City of London’s annual City Dinner highlighting the need to put finance at the centre of the UK's defence and security, by supporting the funding, insurance and building of resilience in the defence sector.

Mr Rathi's speech emphasised that the UK’s national security and resilience is under-prepared, under-funded and under-insured.  The potential losses could have  a direct impact on market integrity.  He stressed the importance of:

• addressing the underinsurance of catastrophe and cyber risks;

• encouraging co-investment in dual-use technologies and critical infrastructure, possibly through FCA-regulated long term asset funds; 

• fixing "the procurement bridge" by implementing "shorter cycles, faster payments, shared contracts banks can lend against";

• investors and lenders co-investing in defence firms and supply chains; and

• industry closing their protection gaps, in relation to operational and cyber exposures.

In line with the FCA's statement of March 2025, Mr Rathi highlighted that the FCA sustainability rules do not prevent defence investment and there is "no regulatory reason preventing defence firms from accessing banking services".

Mr Rathi also stated that the FCA will act where market participants identify ambiguity in the FCA rules that may reduce or prevent defence investment.

Authored by Alexandra Damerau.