And in some cases the position is unclear although a strong or reasonable argument can be made that they do provide cover. The framework is designed to identify and monitor insurers’ approaches to these types of policies, to set out our expectations in relation to these, and to indicate that matters will be escalated where those expectations are not met.
Although the crisis originated in advanced economies, emerging economies too were affected, indeed by much more than they had thought possible. The contagion brought home a simple message. In a rapidly globalizing world, national and international financial stability are interlinked. They are really two sides of the same coin. Another important lesson we learnt is that financial markets are not self correcting.