World banks and insurers to be checked for stability

Britain News.Net
Monday 30th November, 2009

World economic regulators have decided on the names of institutions for cross-border checking.

The supervision exercises will take place over
six insurance companies; Axa, Aegon, Allianz, Aviva, Zurich and Swiss Re along with 24 banks from the UK, continental Europe, North America and Japan.

The Financial Times has reported the list was drawn up by regulators working under the Financial Stability Board, in an effort to identify possible systemic risks.

In the exercise, regulators from the main countries in which a bank or insurer operates and will have the job of co-ordinating the supervision of cross-border financial groups in an effort to stop the entire world system collapsing in any future financial crisis.

The failed US insurance group, AIG, was an example this year of a systemic risk for the rest of the world, partly because of its diversification from insurance into complex financial instruments.

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