Sants: Solvency II costs may outweigh short-term benefits

Scott Sinclair
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Hector Sants, the FSA chief executive, has admitted the "considerable" costs of implementing Solvency II may outweigh the short-term benefits to the industry.

In a Keynote address, Sants said there would be "winner and losers" as a result of the directive, but he stressed roll-out costs were likely to impact small firms in particular. This was mainly because diversifying business lines - more common in larger businesses - was likely to attract a lower capital charge, he said. "When looking at the short-term costs and benefits [of Solvency II], particularly in the context of an implementation bill for industry which will be considerable, it is debatable that for the industry as a whole the benefits will outweigh the costs for UK firms," he s...

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