We do want to see firms invest in ways that support the wider economy, including to manage the risks arising from climate change. However when assessing capital requirements, and here I am thinking of ‘green’ assets and ‘productive finance’, we must as a prudential regulator consider the risks in individual assets. A departure from such an approach reduces the resilience of firms and potentially the wider financial system. However, as Sam also said we are open to removing unnecessary barriers. A significant constraint currently is the binary nature of MA approvals, and in the course of supervisory engagement firms have raised the risk of the loss of the MA where breaches have not been rectified within two months. As part of considering the responses to HMTs Call for Evidence on Solvency II reform, we will review the MA approvals process. And, whether changes there need to be balanced by stronger post-approval supervision to ensure the MA framework continues to work as intended. 3. Supervisory analysis on sizing the MA Once assets are in the MA portfolio, Solvency II sets out the mechanism for deriving the fundamental spread (FS), which reflects an allowance for risks retained by insurers. Deducting the fundamental spread from the credit spread, gives the quantum of the MA [Chart 7].
The theoretical foundations he developed have since been applied to solve puzzles such as why the leaflets on a pinecone follow the Fibonacci sequence and to explain the pattern of animals’ coats from cats to zebras. This work of a lifetime helped lay a cornerstone in theoretical biology. It was, however, the workings of the human mind that inspired Turing’s greatest contributions to human knowledge and our lived experience. Turing answered a fundamental question: whether there is a definitive method that could be applied by machine to solve all mathematical problems. Once again, Turing’s genius lay in his ability to think across boundaries, applying mathematical logic to a problem others had viewed as one of physics. The answer he supplied – captured in his 1936 paper On Computable Numbers5 – provides the very foundations of computer science. Turing envisaged a machine that could be turned to any well-defined task by supplying it with the appropriate program. The eponymous Universal Turing Machine, fed instructions through symbols on an infinite piece of tape, was an abstract concept in his time, but it’s something that recognisably embodies the core principles of a modern computer and the logic of binary code. Moreover, his insight that only computable functions can be calculated is vital to software design. In recognition of the importance of this work, Turing was elected a Fellow of the Royal Society in 1951. Enough for two lifetimes. Cryptographic History of Work on the German Naval Enigma, by C H O'D Alexander, a colleague of Turing’s at Bletchley.