The Financial Crisis – Preparing for the Aftermath
The Financial Crisis – Preparing for the Aftermath

Summary/Abstract: The credit crisis that has had its origins in the subprime markets in the US has spread to other countries and other asset classes as well as the wider economy. This contribution aims to describe some key aspects of the crisis, from its beginnings to the world-wide conse- quences in the wider economies, and to discuss important issues concerning the aftermath, with a special view to the insurance sector. We posit that the crisis has had a differentiating impact on the banking and on the insurance part of the financial services sector. The insur- ance sector has been affected in more indirect ways and its business and risk management models have withstood the pressures so far with resilience. Crisis resolution will require careful, conscientious and prudent action. A lot of the con- fidence in the banking sector and the financial system in general that has been lost over the past months can only be restored if the resulting structure will be efficient, fair and sus- tainable. It is equally important that those structures respond during both, normal times and times of stress. As insurance is a long-term business that depends like few others on effi- cient markets, prudent risk taking by all (including governments) and the availability to diversify across regions and sectors, it has more at stake than many other industries and should have an interest in playing an active role in the discussions and how to frame future regulatory and supervisory structures.

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