The Lloyd’s/Equitas model could be used to rescue banks
Robert Hiscox has criticised “cock sparrows” in the banking sector caught doing “silly things”, and says the Lloyd’s/Equitas model could be copied to save banks, the Mail reports.
“The whole financial services arena completely lost the plot while we were plodding away properly reserved, well capitalised. We hadn't taken our balance sheet and punted it on cocoa. We didn't have a casino side of the business,” he said.
“Our reconstruction and renewal followed a period of very bad trading in insurance, just like the banks traded appallingly in their products.
“We had business being passed around the market, we were reinsuring with ourselves...rather like these loans being taken and handed on to someone else who borrows money to buy them and passes them on.”
Lessons from Lloyd’s
Hiscox believes regulators should have learnt more from the lessons of Lloyds' troubles.
“It's amazing that in the 15 years since banks have steadily got more and more bloated, greedy, more and more determined to make their profits bigger than their neighbours and all the time the regulator thought it had a complete handle on their liabilities.”
The Mail contains a lengthy interview.
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