ABI: De Larosière report a positive step
The De Larosière reports key recommendations will help rebuild trust in European financial services regulators, says the ABI (Association of British Insurers). The ABI particularly supports De Larosière’s calls for the early adoption of the Solvency II directive, the proposed strengthening of supervisory powers at European level, and reform to the governance of the IASB.
Overall response
Stephen Haddrill, the ABI’s Director General, said:
“The De Larosière proposals challenge regulators, and those they regulate, to think differently. Whether in London, Brussels or New York we must rise to the challenge, not keep our heads in the sand. Narrow views of national interest must give way to effective international collaboration. De Larosière’s group is therefore right to propose strengthening the coordination of supervision across Europe’s boundaries.
“De Larosière’s proposals also rightly recognise the dangers of more regulation, and instead focus on the need for better quality supervision and oversight.”
Strengthening of supervisory powers at European level
Stephen Haddrill said:
“Global financial markets must remain open, with capital flowing to where it can be best used for consumers and investors. But the crisis has shown that international markets must be effectively supervised by regulators that understand cross-border risks.
“We therefore support the increased resources and powers for Level Three committees and, in due course, the plans to transform the committees into European Authorities as part of an integrated system of supervision. These are moves the ABI has previously called for, as it will allow better cross-border regulation and oversight.”
Solvency II Directive (regulation of insurers) should be adopted by May 2009 and include group support
Stephen Haddrill, said:
“We have long argued for group support, which would allow European insurers to benefit from modern, world leading regulation. We are now at a critical time in the negotiations and we hope those involved take on board these points, which mirror the views of the European Parliament, Commission and the insurance industry across Europe.”
Oversight and governance of the International Accounting Standards Board (IASB) be strengthened
Stephen Haddrill, Director General of the ABI and a representative of the IASB and FASB’s Financial Crisis Advisory Group (FCAG), commented:
“Accounting standards should be set by a genuinely independent body but such independence must depend on the governance of the IASB commanding the respect and support of all stakeholders. The voice of investors must be strengthened within the IASB and it must be given legitimacy by being securely rooted in international law.”
The UK insurance industry is the largest in Europe, and in total European insurers generate premium income of ?1,110bn, employ over one million people and invest more than ?7,200bn in the European economy.
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Notes for Editors
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2. The ABI is the voice of the insurance and investment industry. Its members constitute over 90 per cent of the insurance market in the UK and 20 per cent across the EU. They control assets equivalent to a quarter of the UK’s capital. They are the risk managers of the UK’s economy and society. Through the ABI their voice is heard in Government and in public debate on insurance, savings and investment matters.
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Copies of all ABI news releases, together with other information from the Association, can be seen on our website http://www.abi.org.uk
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