- Nordic regulators relax discount rates

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A combination of plunging equity values and a decline in the risk-free bond yields of Sweden and Denmark has led both countries' financial supervisors to permit the spreads on locally issued covered bonds and mortgage bonds to be used as a discount rate to value pension liabilities. The move, which amounts to allowing firms to incorporate an asset liquidity premium in their solvency calculations, is likely to strengthen the case of UK life firms advocating a similar approach in Solvency II.

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