Leverage

3. Leverage in the financial sector.

  • The pandemic stressed the resilience of banks, but they remain well capitalized.
  • Leverage at broker-dealers also remains low.
  • In contrast, measures of leverage at life insurance companies are at post-2008 highs..... (p7)

2020 11  - FRB - Financial stability report - Leverage - [LINK]

  • The  changes in  the  nature of  the  insurance  industry over the  past several  years, both  in  terms of  product  diversification  and asset  diversification,  has  created  considerable  stress  on  the  regulatory  control  mechanisms.  Some  of  the  symptoms of  the problem  are:

     2. Increased leveraging of insurance companies through  long-term interest rate guarantees on an increased scale.

1984-1, NAIC Proceedings - VALUATION OF ASSETS AND LIABILITIES (p265-266)