Comments on: The systemically-important 30

By: Ginger Yellow

Ginger Yellow — Tue, 01 Dec 2009 11:52:43 +0000

“They do more stress testing of longer term scenarios, rather than what the quants did with mainly short-term VAR.”Well, they do on the insurance side of things. But insurers performed just as badly as the banks, if not worse, with their investments.

By: David Merkel

David Merkel — Mon, 30 Nov 2009 22:18:13 +0000

The reason there are no US insurers there is the bancassurance model never took off here. If I can be more controversial though, on a solvency basis, the state-controlled regulation of solvency of insurers has been more risk averse (and sound) than the national regulation of banks.Actuaries are a plus as well; banks don’t have them. They do more stress testing of longer term scenarios, rather than what the quants did with mainly short-term VAR. The cruder models work better than the fancy ones, because markets aren’t always liquid.Insurers usually possess “table stability” rather than the “bicycle stability” that banks possess. Bicycles are stable when they are moving, but not if they stop. Tables are always stable. Most insurers would find it difficult to stop writing business, but they can typically do it without affecting solvency. Banks have a harder time with that because of their shorter funding structures and hedging needs.http://alephblog.com/2009/01/03/bi cycle-stability-versus-table-stability-i i/

By: Tim Backshall

Tim Backshall — Mon, 30 Nov 2009 17:43:53 +0000

Might be interesting to some – http://www.scribd.com/doc/23385096/FSB30 -Intrinsics

By: vk9141

vk9141 — Mon, 30 Nov 2009 15:11:16 +0000

Ginger Yellow – good point well made

By: Ginger Yellow

Ginger Yellow — Mon, 30 Nov 2009 15:05:06 +0000

Because these are the institutions which are most likely to cause global problems. The whole point of the list is to focus complicated cross-border supervision efforts where they’re needed most. Despite their size, Wells Fargo and Berkshire Hathaway are overwhelmingly domestic institutions. The same can’t be said for Mizuho or Axa, which have substantial overseas operations (indeed, for Axa, I’d be surpised if even half of their business was in France).