7 Things look different in Europe, however. Here, it is mainly the credit markets which absorb economic shocks – and not particularly effectively at that. All told, only around 40% of a given shock is cushioned before it impacts on consumption. 8 Boosting the role played by the equity markets and their cross-border integration would thus contribute to improving risk sharing in Europe.
It’s also a valuable part of the work of the FSB Standing Committees on Supervision and Regulatory Cooperation and Standards Implementation. FSB members tell me they appreciate the regular updates by IAIS Executive Committee chair Vicky Saporta. Our two organizations have worked together closely on addressing systemic risk related to insurance.