UBS Chair Warns of Systemic Risks in Insurance Sector
Colm Kelleher, UBS chair, cautioned that insurance companies seeking favorable ratings for their private credit assets create a “looming systemic risk” for global finance. Speaking at the Hong Kong Monetary Authority’s Global Financial Leaders’ Investment Summit, Kelleher highlighted that insurers, especially in the US, are involved in “ratings arbitrage” similar to strategies that fueled the 2008 financial crisis, according to the Financial Times.
European Banks’ Dollar Exposure
The European Banking Authority (EBA) has warned about the increasing dollar exposure of European banks, signaling a potential vulnerability in the financial system.
Additional Financial Sector Updates
- Santander is preparing an internal candidate for the UK chief role.
- JPMorgan is undergoing US government reviews concerning its ‘debanking’ practices.
- Citi is in negotiations to offer dollar and euro clearing services for Angola’s Banco de Fomento Angola (BFA).
- Goldman Sachs’ David Solomon warned of a possible US economic “reckoning” if growth does not improve.
Climate Risk Approach
The Bank of England must enhance its approach to managing climate risks, according to the World Wildlife Fund (WWF).
“Insurance companies pursuing favourable ratings for their private credit assets poses a ‘looming systemic risk’ to global finance.”
“Insurers, particularly in the US, are engaging in ‘ratings arbitrage’ reminiscent of practices that contributed to the 2008 financial crisis.”
“Goldman’s Solomon warns of US economic ‘reckoning’ without higher growth.”
Author’s summary: UBS chair warns that insurance industry practices risk global financial stability, while European banks’ dollar exposure grows and other major financial players face regulatory and economic challenges.