An unintended consequence of tighter banking regulation is that businesses are looking beyond banks for their loans. This column argues that this arbitrage opportunity may create systemic risks, including amongst major insurance companies. Using a new methodology, evidence tentatively suggests that insurers are indeed becoming systemic.

October 2011 saw the latest draft of Solvency II, the European Union’s code for regulation of the insurance industry. This column argues that the latest proposals need to be drafted again, urgently.

As if the current debt problems for industrialised economies were not enough, many face the added challenge of ageing populations. This column argues that the biggest threat from an ageing population is the lack of cover for long-term care.

Why do public and private insurance coexist in all countries? This column analyses the determinants of the optimal insurance mix. It reveals how public insurance schemes are constrained if available information on private insurance transactions is incomplete. It discusses how the optimal insurance mix strikes a balance between the overall costs and benefits of insurance as well as the preservation of work incentives.

In crises, insurance companies' asset values may fall significantly without a corresponding drop in their liabilities. European insurers have argued that their liabilities should be discounted by a higher rate during crises, lest regulations force them to raise more capital at exactly the wrong time. This column argues that that would be the wrong approach to the problem.

Should the government intervene to reduce obesity on the basis of equity or efficiency? This column gives reasons to be sceptical common arguments for such interventions. Unless health insurance provision creates significant moral hazard problems that encourage obesity, there is little reason to attack obesity on the basis of health insurance externalities.

The crisis is a brutal reminder of the fragility of banks. This column suggests that managers of large banks be obliged to act as insurers against systemic crises. This would create incentives for them to be concerned about the stability of the banking system as a whole.

Pension system reforms have increased individual choice and individual risk. This column says that the current crisis proves that those reforms exposed individuals to too much risk. It argues for greater use of intergenerational transfers and says that it would be better if retirement plans were treated as insurance rather than pure investment decisions.

Rising food prices are hurting many poor people, but they are helping poor agricultural producers. Food price volatility, on the other hand, is bad for everyone. This column explains poor people’s need for food price variability insurance.

Public policies must address large-scale risks that private insurers are unwilling to cover. Here are five economic principles for providing insurance against catastrophes and an evaluation of the US terrorism insurance programme.