A battle is taking place on where the focus on systemic risk should be placed, with insurance companies taking heat previously focused on banks
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- Insurance companies don't have systemic risk caused by bank runs to the same degree
- Asset reserve process conservative in insurance industry, but they have exposure to natural disasters banks don't
- Insurance industry failed in 1990s due to concentration risk, a systemic risk consideration
- Insurance industry exposed to "non-traditional" financial product systemic risk, much like banks, and this risk includes regulatory risk
- Onus could be on Fed to clearly and publicly explain why an insurance company poses systemic risk, and for the insurance company to explain why it is not a risk
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