Christian Thimann, 10 October 2014

Regulation of the global insurance industry, an emerging challenge in international finance, has two central objectives: strengthening the oversight of insurance companies designated ‘systemically important’; and designing a global capital standard for internationally active insurers. This column argues that it is a Herculean task because the business model of insurance is less globalised than other areas in finance; because global regulators have less experience of insurance than banking where global standards have been pursued for a quarter of a century; and because, as yet, there is limited research-based understanding of the insurance business and its interactions with the financial system and the real economy. But in the aftermath of the global financial crisis and the AIG disaster, regulators are under strong pressure to make progress.

Hyun Song Shin, 04 September 2009

Hyun Song Shin of Princeton University talks to Romesh Vaitilingam about the role of securitisation, mark-to-market accounting and banks’ incentives in the current financial crisis, making an analogy between the feedback mechanisms that made London’s Millennium Bridge wobble dramatically when it was first opened and those that operate within the modern financial system. The interview was recorded in Princeton in August 2009.

Avinash Persaud, 12 October 2008

The US Economic Emergency Act of 2008 allows the SEC to suspend mark-to-market accounting rules. But a blanket suspension would be counter-productive. Crises are times when uncertainty quickly turns to panic. Now is not the time to increase uncertainty by changing accounting standards. This column proposes an alternative: mark-to-funding.

Jon Danielsson, 29 September 2008

Complex financial models and intricate assets structures meant extraordinary profits before the crisis. Markets for structured products became overly inflated as even the banks did not have a clear view of the state of their investments. Given complexity's role in today’s mess, future regulation should focus on variables that are easy to measure and hard to manipulate (e.g. leverage ratios).

Events

CEPR Policy Research