Insurers urged to be cautious of long-term liquidity swaps
Uncertain regulatory and economic environment increases risks associated with liquidity trades, warns Fitch
Insurers should be cautious when considering undertaking long-term liquidity swaps due to current uncertainties in the regulatory and economic environment.
The lack of clarity on Solvency II, in addition to continuing volatility within the financial markets, makes large and long-term liquidity swaps between insurers and banks a potentially risky undertaking, rating agency Fitch has warned.
The risks posed by liquidity swaps transactions could have a negative effect on an insurer's rating, Fitch
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