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This presentation (based on an IMF working paper) explores similarities and differences between banks and insurers and between Basel III and Solvency II. It then highlights possible unintended consequences of Basel III and Solvency II on topics such as cost of capital, funding patterns, interconnectedness and product and/or risk migration.

[as pdf]

Slides

1	Basel III versus Solvency II
2	Agenda
3	Agenda
4	Typical bank and insurer business models differ
5	They also have different funding bases (excluding equity) …
6	Different capital levels …
7	Different accounting bases …
8	And different perspectives on Pillar 1 versus Pillar 2
9	Although some business overlaps (and conglomerates!)
10	Agenda
11	Basel III and Solvency II: Different histories and drivers
12	Basel III and Solvency II Capital Tiering (Pillar 1) (1)
13	Basel III and Solvency II Capital Tiering (Pillar 1) (2)
14	Basel III and Solvency II Capital Requirements
15	Basel III capital requirements
16	Solvency II SCR: Standard Formula
17	Basel III capital requirements (1)
18	Basel III capital requirements (2)
19	Banking backdrop in Europe 2011 to 2013
20	Calculation of required Pillar 1 capital (banks)
21	G-SIBs
22	Calculation of required Pillar 1 capital (insurers)
23	G-SIIs
24	Consequence of decision to have some G-SIIs
25	Risk Aggregation (Pillar 1)
26	Agenda
27	Possible unintended consequences
28	Cost of capital
29	Funding patterns and interconnectedness (1)
30	Funding patterns and interconnectedness (2)
31	Banks’ debt funding sources by type of investor
32	Funding patterns and interconnectedness (3)
33	Risk / Product transfers (1)
34	Risk / Product transfers (2)
35	Policy considerations
36	Summary
37	Important Information

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