Financial Stability and Insurance Markets

Speakers: Francesco Mazzaferro (ESRB), Dimitris Zafeiris (EIOPA)

Recording of the online seminar on 3 September 2019.

More information: http://fbf.eui.eu/event/online-semina...

As is well established, financial institutions can create or amplify systemic risk. In this online seminar, Dimitris Zafeiris (Head of the Risks and Financial Stability Department at the European Insurance and Occupational Pensions Authority – EIOPA) and Francesco Mazzaferro (Head of the Secretariat at the European Systemic Risk Board – ESRB) guide us through the sources of systemic risk in insurance and will spell out that two types of systemic risk can be distinguished.

The first type of systemic risk is contagion (both direct and indirect). The second type is the systematic withdrawal or failure of insurance services, which could lead to a systemic disruption. Zafeiris and Mazzaferro thus argue that a macroprudential approach should address systemic risk and supplement the microprudential supervisory framework for insurers (Solvency II).

This online seminar also highlights that the lack of harmonisation in the field of recovery and resolution of insurers makes cross-border cooperation and coordination more difficult. For the orderly resolution of insurers, a harmonised and comprehensive recovery and resolution framework is essential to better protecting policyholders as well as maintaining financial stability. Finally, Zafeiris and Mazzaferro argue that European policyholders should be adequately and – to a minimum – evenly protected in the event of insurance failures. This could be achieved by harmonising the national insurance guarantee schemes in the EU.


* The views and opinions expressed in this video are those of the speakers or authors in their personal capacity and do not necessarily reflect the official position of the Robert Schuman Centre or the European University Institute. *