Solvency II poses bigger danger to economic stability than bank refinancing

Aaron Woolner
13 Aug 2010

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Solvency II capital charges on corporate credit portfolios backing annuity books will reduce insurers' appetite for corporate paper to such an extent it poses a greater risk to financial stability than bank refinancing pressures, according to the chief executive of a UK insurer.

Even with the Committee of European Insurance and Occupational Pension Supervisors' concession of adding a liquidity premium to the risk-free discount rate used to value liabilities, consensus has emerged that optimal

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