How the Financial Crisis Affects Pensions and Insurance and Why the Impacts Matter

July 1, 2009

Preview Citation

Format: Chicago

Ian Tower, and Gregorio Impavido. How the Financial Crisis Affects Pensions and Insurance and Why the Impacts Matter, (USA: International Monetary Fund, 2009) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper discusses the key sources of vulnerabilities for pension plans and insurance companies in light of the global financial crisis of 2008. It also discusses how these institutional investors transit shocks to the rest of the financial sector and economy. The crisis has re-ignited the policy debate on key issues such as: 1) the need for countercyclical funding and solvency rules; 2) the tradeoffs implied in marked based valuation rules; 3) the need to protect contributors towards retirement from excessive market volatility; 4) the need to strengthen group supervision for large complex financial institutions including insurance and pensions; and 5) the need to revisit the resolution and crisis management framework for insurance and pensions.

Subject: Insurance, Insurance companies, Pension spending, Pensions, Retirement

Keywords: Asset volatility, Balance sheet, Financial crisis, Holding company, Interest rate, Investment risk, Pension assets, Rate of return, WP

Publication Details

Pages:

56
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/151
Stock No:

WPIEA2009151
ISBN:

9781451872989
ISSN:

1018-5941

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