Striking the balance: Insurance and systemic risk regulation
The recent financial crisis highlighted the need for systemic risk monitoring. As a result, systemic risk supervision is likely to increase globally. However, the business model of insurance, which weathered the crisis relatively well, differs fundamentally from that of the banking sector, from which many of the problems during the crisis arose. Insurers and reinsurers, therefore, should not be subject to systemic risk supervision. Group supervision efforts should, however, be pursued.
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