EU in­sur­ers’ cap­i­tal charges may be cut to boost loans

Reuters re­cently re­ported that cap­i­tal charges for in­sur­ers in the Euro­pean Union could be cut to en­cour­age lend­ing for long-term projects and help boost the flag­ging econ­omy. The news agency was re­port­ing on an an­nounce­ment by the bloc’s ex­ec­u­tive body in a high­pro­file pol­icy shift.

The Euro­pean Com­mis­sion has writ­ten to the Euro­pean In­sur­ance and Oc­cu­pa­tional Pen­sions Au­thor­ity (EIOPA) to look at cut­ting the amount of cap­i­tal that in­sur­ers must set aside to cover some types of in­vest­ments. “Euro­pean in­sur­ers are a po­ten­tially pow­er­ful fi­nanc­ing chan­nel for long-term in­vest­ment in growth- and job-en­hanc­ing ar­eas,” says Jonathan Faull, head of the com­mis­sion’s in­ter­nal mar­ket unit in a let­ter pub­lished on the ex­ec­u­tive body’s web­site.

Banks wel­comed the re­view, say­ing lower cap­i­tal charges for in­sur­ers would help kick-start se­cu­ri­ti­sa­tion. Cash-strapped gov­ern­ments have pinned their hopes on the in­sur­ance sec­tor to fund long-term eco­nomic de­vel­op­ment, as banks cur­tail their lend­ing for big projects in re­sponse to tighter bank cap­i­tal rules.

France still prop­erty in­vest­ment hot spot

Ac­cord­ing to the lat­est over­seas prop­erty hot spot re­port, com­piled by Conti Fi­nan­cial Ser­vices, France is still the num­ber one choice for Bri­tons buy­ing prop­erty abroad. In­vest­mentin­ter­na­tional. com re­ported that for the fourth con­sec­u­tive year, France has topped the list, ac­count­ing for 45 per cent of mort­gage en­quiries re­ceived so far this year. This is the coun­try’s big­gest share achieved to date, com­pared to the 39 per cent last year, and just 15 per cent back in 2008. Spain came in sec­ond with 33 per cent of en­quiries, thanks to ex­cel­lent buy­ing con­di­tions and signs that the mar­ket is start­ing to bot­tom out.

Por­tu­gal, ac­count­ing for 10 per cent of en­quiries, is in third po­si­tion for the sec­ond year run­ning. Al­though its share is down by two per cent on last year, in­ter­est has picked up again over the past three months as fall­ing prop­erty prices en­tice buy­ers back. Turkey, Italy, USA, Aus­tralia, Canada, New Zealand and Ire­land make up the rest of the top 10 list.

Clare Nessling, Conti’s op­er­a­tions di­rec­tor, says, “Buy­ers have in­creas­ingly been stick­ing to lo­ca­tions they know and trust, which is why France and Spain are out on their own at the mo­ment and Por­tu­gal is start­ing to rise in pop­u­lar­ity again, too.”

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