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Regulation and the connectedness of insurers to the banking sector: International evidence
Author(s) -
Niehaus Greg,
Rauch Jannes,
Wende Sabine
Publication year - 2019
Publication title -
risk management and insurance review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.386
H-Index - 16
eISSN - 1540-6296
pISSN - 1098-1616
DOI - 10.1111/rmir.12135
Subject(s) - social connectedness , business , liability , systemic risk , financial system , monetary economics , finance , actuarial science , economics , financial crisis , psychology , psychotherapist , macroeconomics
Using variation across countries and time in the degree to which regulations restrict banks and insurers from engaging in the same activities, we find that property/liability insurers' connectedness to the banking sector declines when regulatory restrictions increase, but life insurers' connectedness to banks does not. The results suggest that the connectedness between life insurers and banks is largely due to these institutions sharing common underlying economic and financial risk factors that exist even when regulation restricts these institutions from engaging in each other's activities.