BIS central bankers’ speeches  1  Earnings among euro area banks continue to be weak, with their average return on equity – although markedly improved since the crisis 2 – remaining below their cost of equity. Cost cutting and rationalisation has been ongoing since 2008, making further cost savings harder to achieve. Low profitability constrains the capacity of banks to generate capital internally.
In other words, AIG had become systemically important and had far reaching implications outside the insurance industry. At the Central Bank of Bahrain, we believe that the recent experience of global financial crisis has reinforced that our top priority must remain our duty to ensure the protection of policyholders.