OECD Journal: Financial Market Trends

1995-2872 (online)
1995-2864 (print)
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The articles in Financial Market Trends focus on trends, structural issues and developments in financial markets and the financial sector.


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Volume 2016, Issue 2 You do not have access to this content

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  10 Mar 2017 Green financing: Challenges and opportunities in the transition to a clean and climate-resilient economy

Greening the economy involves improving the quality of the environment and tackling climate change, and is a major policy, economic and financial challenge. Key issues that have emerged in this context relate to financing climate change mitigation and adaptation and how to close the financing gap to fund the needed low-carbon investments. Beyond such capital mobilisation there is the more general challenge of whether and how the financial system can enable capital reallocation consistent with the “green” transition and for the long run, and what risks, opportunities and incentives are involved. This article provides a brief overview and summarises an OECD roundtable discussion on these issues.

JEL classification: Q54, E10, E44, G12, G14, G21, G22, G23, G28.
Keywords: Climate change, low carbon, climate finance, green finance, investment, capital allocation, financial system, disclosure, stranded assets, risks, COP21.                                                      

  17 Dec 2016 The evolution of insurer portfolio investment strategies for long-term investing
Helmut Gründl, Ming (Ivy) Dong, Jens Gal

The recent global financial crisis, combined with regulatory changes in financial industries, has altered the financial landscape in terms of how financing can be achieved and the potential role of institutional investors. The potential role that insurers, particularly life insurers and pension funds, can play as long-term institutional investors has become a central topic of discussion in various fora. How this role develops will, in the long run, affect how firms obtain financing for their investments and ultimately lead to growth of the real economy. This article provides an overview of the evolving investment strategies of insurers and identifies the opportunities and constraints they may face with respect to long-term investment activity. The report investigates the extent to which changes in macroeconomic conditions, market developments and insurance regulation may affect the role of insurers in long-term investment financing. It concludes that regulation should neither unduly favour nor hinder long-term investment as such but place priority on incentivising prudent assetand- liability management with mechanisms that allow for a “true and fair view” of insurers’ risk exposures. In risk-based solvency regulation, an asset’s risk relative to liabilities is reflected in the capital requirements.
JEL classification: G22, E22, F21, O16,
Keywords: insurance, long-term investment, asset-liability management, risk-based capital

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