The Governor of the Bank of England (BoE), Mark Carney, has warned that the insurance industry would be “accountable for their actions if things go wrong.” Writing in The Times newspaper, Carney commented that while insurers escaped unscathed from the financial crisis, they were not too big to fail because they played a “stabilising role in the financial system.”
Commenting on the increase of new capital going into higher-risk investment vehicles, he said that the BoE would remain vigilant. “The insurance sector faces challenges in adjusting to the post-crisis landscape,” said Carney. “These challenges come alongside post-crisis regulatory reforms and legislative changes that challenge insurers’ business models. So alongside reforms that Parliament has asked us to make to hold senior bankers to account, we will create a similar regime for senior managers in the insurance industry.”
In response to Carney’s comments, the Association of British Insurers said: “Mark Carney rightly recognises the important role of the industry in the economy and its strengths, such as innovative approach, strong capital buffers as well as its resilience to the previous economic crisis. Insurers are subject to stringent ‘twin peaks’ regulation from the Prudential Regulation Authority and the Financial Conduct Authority, so the industry expects to be held to account.”
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