Regulation in the Financial Services Industry After the Crisis
Type
fundamental research project
Start Date
22 March 2010
End Date
30 September 2012
Status
completed
Keywords
Financial Crisis
Financial Services Industry
Regulation
Description
The recent collapse of important participants in the capital markets has revealed a worrisome fragility of the international financial system. Issues related to supervision and corporate governance have often been deemed causes of the crisis. Such issues include procyclicality and similar phenomena due to regulatory rules, regulatory arbitrage, inappropriate accounting standards, lack of transparency, and inadequate management decisions, probably driven by wrong incentives. While insurance regulation has already been the subject of reforms in Europe (Solvency II, Swiss Solvency Test), the ongoing financial market crisis has focused even more attention on regulation in financial services, both among academics and practitioners. With this research project, our hope is to derive conclusions for a financial market architecture after the crisis, all with a special emphasis on insurance companies.
Leader contributor(s)
Member contributor(s)
Rymaszewski, Przemyslaw
Partner(s)
Universität Ulm
Funder(s)
Topic(s)
Financial Crisis
Financial Services Industry
Regulation
Method(s)
Modeling
Empirical Research Methods
Range
HSG Internal
Range (De)
HSG Intern
Division(s)
Eprints ID
61216

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  • Publication
    A Traffic Light Approach to Solvency Measurement of Swiss Occupational Pension Funds
    (Palgrave Macmillan Ltd., 2011-04-01)
    Braun, Alexander
    ;
    Rymaszewski, Przemyslaw
    ;
    Schmeiser, Hato
    In this paper, we combine a stochastic pension fund model with a traffic light approach to solvency measurement of occupational pension funds in Switzerland. Assuming normally distributed asset returns, a closed-form solution can be derived. Despite its simplicity, we believe the model comprises the essential risk sources needed in supervisory practice. Owing to its ease of calibration, it is well suited for a regulatory application in the fragmented Swiss market, keeping costs of solvency testing at a minimum. We calibrate and implement the model for a small sample of ten Swiss pension funds in order to illustrate its application and the derivation of traffic light signals. In addition, a sensitivity analysis is conducted to identify important drivers of the shortfall probabilities for the traffic light conditions. Although our analysis concentrates solely on Switzerland, the approach could also be applied to similar pension systems.
    Type: journal article
    Journal: Geneva Papers on Risk and Insurance - Issues and Practice
    Volume: 36
    Issue: 2
    DOI: 10.1057/gpp.2011.3
    URI: https://www.alexandria.unisg.ch/handle/20.500.14171/94311
    Scopus© Citations 8
  • Publication
    What Do We Know About Market Discipline in Insurance?
    (Wiley & Sons, 2012-09)
    Eling, Martin
    The aim of this article is to summarize the knowledge on market discipline in insurance and other financial service sectors. Market discipline can be defined as the ability of customers, investors, intermediaries (agents, brokers), and evaluators (analysts, auditors, rating agencies) to monitor and influence a company's management. Looking at banking is especially interesting, since market discipline in this field has been studied extensively. Based on existing knowledge, we develop a framework for researching market discipline in insurance that includes its most important drivers and impediments. The results highlight a significant need for continuing research. The findings are of relevance not only for European insurers and regulators, but for institutions outside Europe.
    Type: journal article
    Journal: Risk Management and Insurance Review
    Volume: 15
    Issue: 2
    DOI: 10.1111/j.1540-6296.2012.01217.x
    URI: https://www.alexandria.unisg.ch/handle/20.500.14171/91089
    Scopus© Citations 13