scholarly journals Possible Unintended Consequences of Basel III and Solvency II

2011 ◽  
Author(s):  
Gregorio Impavido ◽  
Ahmed I. Al-Darwish ◽  
Michael Hafeman ◽  
Malcolm Kemp ◽  
Padraic O'Malley
Keyword(s):  
Solvency Ii ◽  
Unintended Consequences ◽  
Basel Iii

IMF Working Paper Monetary and Capital Markets Department Possible Unintended Consequences of Basel III and Solvency II

2013 ◽  
Vol 19 (2) ◽  
pp. 273-325 ◽  
Author(s):  
Ahmed Al-Darwish ◽  
Michael Hafeman ◽  
Gregorio Impavido ◽  
Malcolm Kemp ◽  
Padraic O'Malley
Keyword(s):  
Financial Institutions ◽  
Cost Of Capital ◽  
Solvency Ii ◽  
Unintended Consequences ◽  
Basel Iii ◽  
Financial Deepening ◽  
Working Paper ◽  
Capital Funding ◽  
The Stability ◽  
The Imf

AbstractThis Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.In today's financial system, complex financial institutions are connected through an opaque network of financial exposures. These connections contribute to financial deepening and greater savings allocation efficiency, but are also unstable channels of contagion. Basel III and Solvency II should improve the stability of these connections, but could have unintended consequences for cost of capital, funding patterns, interconnectedness, and risk migration.

Possible unintended consequences of Basel III and Solvency II ‐ Abstract of the Edinburgh discussion

2013 ◽  
Vol 19 (2) ◽  
pp. 326-340
Author(s):  
Malcolm Kemp
Keyword(s):  
Solvency Ii ◽  
Unintended Consequences ◽  
Basel Iii ◽  
Publication Type

This abstract relates to the following paper:Al-DarwishA., HafemanM., ImpavidoG., KempM. and O'MalleyP.Possible Unintended Consequences of Basel III and Solvency II.British Actuarial Journal, doi:10.1017/S1357321713000391

scholarly journals Possible Unintended Consequences of Basel III and Solvency II

2011 ◽  
Vol 11 (187) ◽  
pp. 1 ◽  
Author(s):  
International Monetary Fund
Keyword(s):  
Solvency Ii ◽  
Unintended Consequences ◽  
Basel Iii

Basel Iii and Solvency Ii: Are the Risk Margins for Investments in Pv and Wind Adequate?

2013 ◽  
Vol 24 (1-2) ◽  
pp. 171-194 ◽  
Author(s):  
Barbara Breitschopf ◽  
Martin Pudlik
Keyword(s):  
Solvency Ii ◽  
Basel Iii

scholarly journals Planned Solvency III Regulation: Should It Be Adopted Outside the European Union?

2019 ◽  
Vol 13 (1) ◽  
Author(s):  
Peter Zweifel
Keyword(s):  
European Union ◽  
Capital Market ◽  
Solvency Ii ◽  
Business Strategies ◽  
Basel Iii ◽  
The European Union ◽  
Leverage Ratio ◽  
Solvency Regulation ◽  
Regulatory Failure ◽  
The Capital Market

Abstract Several countries outside the European Union consider adopting its solvency regulation for their insurance industries. However, Solvency I and (to a lesser extent) Solvency II were found to run the risk of inducing more rather than less risk-taking by insurers (Zweifel, Peter. 2014. “Solvency Regulation of Insurers: A Regulatory Failure?” Journal of Insurance Issues 37 (2): 135–157.). Companies are led to neglect parameters that link them to developments in the capital market when determining their endogenous perceived efficiency frontier (EPEF), causing it to become steeper. Given homothetic risk preferences, senior management is predicted to opt for increased rather than reduced volatility. By way of contrast, if modeled after Basel III for banks, planned Solvency III will ask insurers to take developments in the capital market into account in their formulation of business strategies designed to ensure solvency (Principle 5 of Basel III). In addition, the stipulated decrease in their leverage ratio is shown to reduce the slope of the EPEF for insurers with little solvency capital. Contrary to its predecessors, Solvency III is therefore predicted to make insurers take on less risk, which argues for its for adoption beyond the European Union if properly implemented.

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