November 11, 2004 by Canadian Underwriter
The U.S. Federal Reserve Board’s decision to raise the federal fund rate 25 basis points to 2.0% sets up the prospect for similar action by The Bank of Canada. While the Fed is expected to raise rates by 25 points in each of its next eight meetings, BoC is expected to raise rates twice more over the next three meetings, to reach 3.0% by March, 2005, notes Kurt Karl, chief economist for Swiss Re. The BoC move should maintain “a small but shrinking gap between its [the BoC] target rates and the US federal funds rate”. The U.S. federal funds rate should reach 2.25% by yearend and 4.0% by the end of 2005.
London-based brokerage Agnew Higgins Pickering & Co. has announced the impending retirement of chair Tony Pickering, set for next June. AHP says Pickering will be succeeded by Richard Borgonon, who becomes chair-designate at the beginning of 2005. Borgonon is the former chair of international operations for the managing general underwriting companies of Aon.
The failure of new corporate governance rules in many countries to address the full spectrum of corporate risks was a key topic at last week’s U.K. Association of Insurance and Risk Managers (AIRMIC) biennial convention. Tarlok Teji, a partner at Deloitte, told the conference that new legislation is focused on disclosure and shareholder reporting in response to backlash from the investment community, but there is much more to good governance. “Too many organisations take needless risk because, for example, they do not fully understand their supply chains, have sloppy human resources procedures or take regulatory compliance for granted. These issues go to the heart of good business risk management,” he says.