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> because pension and insurance rules (that were largely adopted from Europe) mean that they have to own large amounts of govt bonds Let me help you with the b

> because pension and insurance rules (that were largely adopted from Europe) mean that they have to own large amounts of govt bonds Let me help you with the brevity - you mean Solvency II. So you're fine with governments bailing out the financial system with our money, but not happy if they put (admittedly heavy-handed) measures in place to stop the casino mentality.

skippyboxedhero 4y ago
No, I mean Solvency II amongst other rules. There are many others (pension regulations are even worse). Let me help you with complexity (financial regulation doesn't happen to be particularly simple, it won't yield before your mighty intellect because you had a thought, you have to do the work). Er no, the reason Solvency II exists is to bailout govts (and insurance companies, it is a tacit way of decreasing competition). That is the beauty of these regulations: you have poor people in Europe who are getting absolutely rinsed by this stuff AND they will actually fight for it (the "casino mentality"...is that something that European Commissioner tells you to say?). It does nothing to increase systemic safety: look at Europe, almost every large bank is functionally insolvent, requires massive zero-interest loans from the govt, almost all new loans in some of the large economies are now govt-guaranteed...is this what a safe system looks like. If you take a country like Germany, which has gone the farthest down this route, savers have net financial wealth equal to Greece. Look at Allianz's market share, they own everything. It is tragic. Removing these regulations will be massively beneficial for consumers, the reason they exist at all is to limit competition and choice. Btw, this isn't hard. The US made these changes in the early 70s, that is why they fund most VC activity in London. Consumers need choice, they don't need to have their money trapped in govt bonds subsidizing govts that can't repay their debts in a free market, the only result of this is lower returns for consumers.
- taffronaut 4y ago
  > ...is that something that European Commissioner tells you to say? I guess we are diametrically opposed. I can equally ask you if Jacob Rees-Mogg writes your posts.
- klelatti 4y ago
  Actually key parts of Solvency II (Matching Adjustment - drafted by the U.K.) specifically favours corporate debt over government bonds which is in part why actually U.K. insurers don’t hold much government debt at all. Really odd that you should get this so wrong.
  - skippyboxedhero 4y ago
    This isn't the case. Solvency II treats govt bonds as essentially risk-free, corporate bonds are not treated as risk-free, and there are substantial capital requirements for non-bond investments. UK insurers have substantial holdings of govt debt (really odd that you should get this so wrong), they are one of the largest non-govt investors in the market (obviously).
    - klelatti 4y ago
      What return can insurers assume under the MA and how does that compare to government bonds?

skippyboxedhero 4y ago

No, I mean Solvency II amongst other rules. There are many others (pension regulations are even worse). Let me help you with complexity (financial regulation doesn't happen to be particularly simple, it won't yield before your mighty intellect because you had a thought, you have to do the work). Er no, the reason Solvency II exists is to bailout govts (and insurance companies, it is a tacit way of decreasing competition). That is the beauty of these regulations: you have poor people in Europe who are getting absolutely rinsed by this stuff AND they will actually fight for it (the "casino mentality"...is that something that European Commissioner tells you to say?). It does nothing to increase systemic safety: look at Europe, almost every large bank is functionally insolvent, requires massive zero-interest loans from the govt, almost all new loans in some of the large economies are now govt-guaranteed...is this what a safe system looks like. If you take a country like Germany, which has gone the farthest down this route, savers have net financial wealth equal to Greece. Look at Allianz's market share, they own everything. It is tragic. Removing these regulations will be massively beneficial for consumers, the reason they exist at all is to limit competition and choice. Btw, this isn't hard. The US made these changes in the early 70s, that is why they fund most VC activity in London. Consumers need choice, they don't need to have their money trapped in govt bonds subsidizing govts that can't repay their debts in a free market, the only result of this is lower returns for consumers.

taffronaut 4y ago
> ...is that something that European Commissioner tells you to say? I guess we are diametrically opposed. I can equally ask you if Jacob Rees-Mogg writes your posts.
klelatti 4y ago
Actually key parts of Solvency II (Matching Adjustment - drafted by the U.K.) specifically favours corporate debt over government bonds which is in part why actually U.K. insurers don’t hold much government debt at all. Really odd that you should get this so wrong.
- skippyboxedhero 4y ago
  This isn't the case. Solvency II treats govt bonds as essentially risk-free, corporate bonds are not treated as risk-free, and there are substantial capital requirements for non-bond investments. UK insurers have substantial holdings of govt debt (really odd that you should get this so wrong), they are one of the largest non-govt investors in the market (obviously).
  - klelatti 4y ago
    What return can insurers assume under the MA and how does that compare to government bonds?