Regulation in the Financial Services Industry After the Crisis

The recent collapse of important participants in the capital markets has revealed a worrisome fragility of the international financial system. Issues related to supervision and corporate governance have often been deemed causes of the crisis. Such issues include procyclicality and similar phenomena due to regulatory rules, regulatory arbitrage, inappropriate accounting standards, lack of transparency, and inadequate management decisions, probably driven by wrong incentives. While insurance regulation has already been the subject of reforms in Europe (Solvency II, Swiss Solvency Test), the ongoing financial market crisis has focused even more attention on regulation in financial services, both among academics and practitioners. With this research project, our hope is to derive conclusions for a financial market architecture after the crisis, all with a special emphasis on insurance companies.