Should Berkshire Hathaway be designated systemically important?
Wednesday, 04 22 2015, Category: Insurance and Reinsurance, Country: World
According to reports the Bank of England has written to the U.S. Treasury to ask why the reinsurance business of Warren Buffett’s Berkshire Hathaway has been left off the initial list of financial institutions that are deemed systemically important, or too big to fail.
It’s a good question. At this stage a number of major primary insurance firms have been named as systemically important, or so large that their failure poses a risk to the wider financial market, but no reinsurance companies.
According to the report in the Financial Times, a number of primary insurers have fought back by claiming that it is actually the major global reinsurance firms that are systemically important, not the primary providers of insurance policies.