Risk transfer to insurers could threaten Basle II, warns UK central banker
BASLE II UPDATE
LONDON -- Financial stability and financial efficiency could be undermined if the new Basle II capital adequacy rules proposed for banks are simply "arbitraged away" by the transferral of banking risks to insurers, according to a senior UK central banker.
In May, Bank of England deputy governor David Clementi called for a critical look at the rationale for the difference in the way banks and insurance companies are regulated.
Clementi said he would welcome being put on the international agenda the
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