Association of British Insurers: Better regulator crucial for success of tripartite system

Association of British Insurers: Better regulator crucial for success of tripartite system

Association of British Insurers: Better regulator crucial for success of tripartite system

Responding to the Treasury’s proposals on the possible future direction of the Tripartite System, Stephen Haddrill, the ABI’s Director General, said:

“It is clear there were serious failings and all elements of the Tripartite system have to work better, now more than ever. On balance, the Chancellor is right to resist the temptation to dismantle the Tripartite arrangement and start again. We want effort to be focused on ensuring the system works better, rather than a major structural upheaval which will delay much-needed change.”

“We think that improved calibrated capital requirements based on the activities of banks, coupled with better application of competition rules, would be a better way of addressing banks that are considered ‘too big to fail’ than splitting them up.

“We support the proposed Council for Financial Stability (CFS), as we have already called for the Governor of the Bank to Chair a Macro-prudential Committee, containing representatives of the Tripartite authorities. This would deal with long-term risk assessment, flagging up systemic risks such as asset price bubbles. This makes more sense than having a long turf war between the Bank and the FSA. The Treasury also has a vital role to play, through regular consultation with business and promoting UK interests in the EU and globally.

“A key change should be a more mature, transparent relationship between the FSA and the companies it regulates. This will require a more accountable FSA, with an honest, regular appraisal of its performance. This will require a higher seniority of supervisors at the FSA who fully understand the businesses they are supervising.

“The ABI will look at this in further detail and will respond to the consultation in due course.”

Notes

1. Enquiries to:
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)

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.

3. An ISDN line is available for broadcasts.

4. More news and information from the ABI is available on our web site, www.abi.org.uk