Crowding-in institutional investors

Protection against political risks

Accompanying the efforts to standardise infrastructure debt as an asset class, investor rights also need to be strengthened, especially regarding dispute resolution1.

This is particularly important for investments of a long-term nature, such as infrastructure that are prone to policy changes across political cycles. Possible ways forward could be a standardised dispute resolution mechanism, international arbitration, and the establishment of bilateral investment treaties (BITs). Moreover, there has to be broad establishment of BITs to protect investors against government interference. In Europe, BITs should be aligned with EU law, thus making them compatible with the EU single market idea.

Says Swiss Re's investment strategist, Jerome Haegeli:  "Without investor rights, there will be no investors".

Notes

1.  p33 of Growth recipes - the need to strengthen private capital markets.

 


Supporting financial resilience

Re/insurance supports financial resilience by acting as a shock absorber and promoting growth through its core businesses. This is particularly important in a challenging and volatile macro-economic environment.

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