Archive

Leaman - What’s next? Bulk annuity insurers

The Bulk Purchase Annuities (BPA) sector is continuing its rapid growth and is poised to benefit from substantial regulatory reforms following the Government’s review of Solvency II. Lisa Leaman outlines how the new Solvency UK insurance regulatory regime – in particular the reforms to the matching adjustment - will support insurers to meet the commitment they have made to further invest in assets that benefit the UK economy. There are new opportunities and challenges ahead, and Lisa explains how the PRA, working with industry, aims to respond to these.

The speech by Lisa Leaman at the Bulk Purchase Annuities Conference discusses the changes and developments in the bulk purchase annuities (BPA) sector. The sector has experienced rapid growth in demand, fueled by improved scheme funding levels and higher interest rates. The structure of transactions has also evolved to meet demand, with increasing complexity and features such as long price locks and deferred premiums. The Solvency UK reform package aims to support the industry in investing more in the UK economy and enhance transparency in the sector. The proposed reforms include greater investment flexibility within the MA portfolio, removing the cap on MA benefit for sub-investment grade assets, and simplifying the regulatory process. The speech emphasizes the importance of adapting the MA rules to enable the life insurance sector to play a bigger role in productive investment. The focus on accountability, resilience, and transparency is highlighted, with proposed changes in attestations and enhanced disclosures to ensure the prudence and financial strength of the industry. The speech concludes with optimism for the future of the BPA sector, anticipating positive developments including sound management of defined benefit liabilities, increased transparency, and productive investment in the UK economy.


Positivity Score: 85
Uncertainty Score: 30

state contingency of monetary policy transmission - nan

Slides presented by Isabel Schnabel, Member of the Executive Board of the ECB, at the Inaugural conference of the ChaMP Research Network “Challenges for Monetary Policy Transmission in a Changing World (“ChaMP”)”


The speech highlights the significance of considering the state contingency of monetary policy transmission when formulating policies. It emphasizes that the effectiveness of monetary policy depends on the state of the economy and the specific shocks it faces. In periods of economic uncertainty, the transmission of monetary policy may be less effective as caution increases in spending and investment decisions. Additionally, the impact of monetary policy transmission can vary across different sectors of the economy, including the financial sector, housing market, and credit availability. Policymakers need to understand these dynamics to make appropriate responses to changes in the economic landscape.



Positivity: 80
Uncertainty: 65

Cipollone - Innovation, integration and independence

Speech by Piero Cipollone, Member of the Executive Board of the ECB, at the ECB conference on “An innovative and integrated European retail payments market”

In his speech, Piero Cipollone highlights the progress made in the Single Euro Payments Area (SEPA) in addressing the fragmentation in non-cash payments. However, he points out that SEPA has fallen short in digital payments, particularly at the point of interaction, such as in-store, mobile, and e-commerce payments. This fragmentation hampers competition, innovation, and resilience in the European payments market. Cipollone emphasizes the need for a comprehensive vision that encompasses both public and private solutions to further integrate European payments and reduce dependencies on non-European players. He discusses the importance of the digital euro project, which aims to provide a digital form of cash with pan-European reach and comprehensive payment solutions. Additionally, he emphasizes the need to strengthen the "classic SEPA" framework and the deployment of instant payments. Cipollone concludes that addressing the challenges in the retail payments sector requires industry readiness and cooperation between public and private sectors.


Positivity: 85
Uncertainty: 70

Pill - Strategy and stance

In these remarks, Huw Pill assesses the inflation outlook in light of recent economic data, and offers his reflections on monetary policy strategy. He also discusses the recent Bernanke Review into the Bank of England's forecasting.

In his speech, Huw Pill discusses the monetary policy outlook for the UK. He states that the outlook for monetary policy has not substantially changed since March, despite a decline in headline inflation. He emphasizes the significance of Ben Bernanke's review of the Bank of England's macroeconomic forecasts and its role in shaping policy. Pill highlights the need for the MPC's policy process to be more robust in the face of uncertainties. He discusses the recent conjunctural data, which has offered little relevant news to alter his assessment of the monetary policy stance. Pill believes that headline CPI inflation will fall close to the 2% target in the coming months, but the focus should remain on the persistent component of inflation. He mentions signs of a downward shift in inflation but notes that there is still a way to go before stabilization. Pill also discusses the importance of having a monetary policy strategy that provides a framework for analysis and decision-making and emphasizes the need to get the basics right before implementing new models and frameworks. Overall, his assessment of the monetary policy outlook remains largely unchanged.


Positivity: 65
Uncertainty: 50