Since my last blog entry, so much seems to have happened in the global financial market. With Government rescues, subsidies, stock market volatility etc there are now the inevitable calls for greater co-ordination between regulators when considering global companies. There is a growing fear however that more oversight will be introduced that becomes overburdensome. In addition, recently the CFO Forum has asked for urgent amendments to accounting rules in the build up to 3rd quarter results, proposing that mark to market valuations be replaced.
There is clearly a need for governments to work together and for certain regulatory principles to be re-thought. Banking is the main focus but the insurance industry will be affected. The recent IAIS annual meeting spent much time on mutual recognition discussions and the crisis as a whole, concluding in a commitment to further enhance co-ordination efforts and move forward in development of supervisory standards. This is to be welcomed.
A recent report by the Market Security Team of Willis Corporate Holdings gave some encouraging news in that most general insurers have seen limited impact from the credit crisis, with limited exposure to sub-prime investments. Things could still develop adversely but the findings gave some cause for optimism.
Last but not least, what of the rating agencies – a tighter regulatory environment seems both inevitable and sensible.
Considerable resolve needs to be shown in these challenging times. With this overall fear or expectation of more regulation ahead and more potential “bad news to come out” (D Mahoney recent speech), it is vital for associations and regulated firms to be well prepared in their future consultations and representations to key regulators to ensure such regulation is balanced.
