Wednesday, 4 April 2012

Omnibus II - ECON compromises dripping out

Still no sign of the Omnibus II compromise text out of ECON yet, but it would appear that some of the great and good have seen it - the InsureReinsure blog has summarised the major changes pre-ECON, while Milliman's William Coatesworth and chums have released a very useful note expanding on those topics.

Some of the tinkering around with dampeners is clearly moving away from market consistent balance sheets, but for me the most substantial shift is in the changes to the treatment of government bonds no longer being risk-free. While this is a shift towards market consistency (or at least the patently obvious!), no doubt it will raise a few heckles during the trialogues, where some of Europe's larger undertakings who don't carry bundles of mediterranean debt may feel aggrieved.

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