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The Limits of Market-Based Risk Transfer and Implications for Managing Systemic Risks

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Author Info

  • Nicolas R. Blancher
  • François Haas
  • John Kiff
  • Oksana Khadarina
  • Paul S. Mills
  • Parmeshwar Ramlogan
  • William Lee
  • Yoon Sook Kim
  • Todd Groome
  • Shinobu Nakagawa

Abstract

The paper discusses the limits to market-based risk transfer in the financial system and the implications for the management of systemic long-term financial risks. Financial instruments or markets to transfer and better manage these risks across institutions and sectors are, as yet, either nascent or nonexistent. As such, the paper investigates why these markets remain "incomplete." It also explores a range of options by which policymakers may encourage the development of these markets as part of governments'' role as a risk manager.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/217.

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Length: 49
Date of creation: 01 Oct 2006
Date of revision:
Handle: RePEc:imf:imfwpa:06/217

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Related research

Keywords: Risk management; Financial systems; Insurance regulations; Bank supervision; pension; health care; risk transfer; life insurance; reinsurance; longevity risk; insurance companies; retirement; life insurers; pension funds; pensions; credit risk; catastrophes; market risk; contingent liabilities; insurance industry; accounting standards; public pension; pension liabilities; long-term care; insurance risk; life expectancy; basis risk; risk sharing; social security; beneficiaries; moral hazards; capital requirements; insurance markets; long-term projections; pension fund; price risk; insurance coverage; risk transfer instruments; insurance premiums; insurance policies; retirement income; pension savings; pension debt; underwriting; risk modeling; supervisory frameworks; pension schemes; pension systems; risk mitigation; insurance regulation; financial reporting; implicit pension debt; deposit insurance; defined benefit; annuity providers; private pension; mortality tables; supervisory framework; economic risks; insured losses; moral hazard; reinsurance contracts; occupational pension schemes; pension benefits; catastrophic risks; insurance supervisors; reinsurance companies; occupational pension; future obligations; health care system; retirement age; private insurance; consumer protection; public pensions; state pension; pension benefit; public pension liabilities; insurance industries; pension plan; risk insurance; risk assessments; asset management; accounting rules; life annuities; insurable risks; market risk management; life annuity; non-life insurance; health insurers; actuarial assumptions; pension expenditure; health insurance; asset managers; defined benefit pension plans; accident insurance; defined benefit schemes; investment advice; pension liability; accounting framework; retirement saving; risk profile; reinsurance contract; retirement savings; risk reduction; general insurance; indexed bonds; pension beneficiaries; longevity risks; pension plans; pension costs; survivor benefits; counterparty risks; reinsurance markets; benefit pension; company pension; pension funding; pension fund managers; insurance company; unfunded pension; replacement rates; replacement rate; insurance commissioners; tax rates; state pensions; private pension benefit; investment products; global pension; risk assessment; applications; commissioners; risk portfolio; insured events; benefit schemes; defined benefit pension; insurance agencies; benefit adjustments; risk analysis; underwriting standards; pension provision;

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References

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Citations

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Cited by:
  1. Blake, David & Boardman, Tom & Cairns, Andrew, 2010. "Sharing longevity risk: Why governments should issue longevity bonds," MPRA Paper 34184, University Library of Munich, Germany.
  2. René Weber & David S. Gerber, 2007. "Aging, Asset Allocation, and Costs," IMF Working Papers 07/29, International Monetary Fund.
  3. David Blake & Christophe Courbage & Richard MacMinn & Michael Sherris, 2011. "Longevity Risk and Capital Markets: The 2010–2011 Update," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 36(4), pages 489-500, October.

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