Bank of England tells UK to hold insurers to account on infrastructure

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The government should check that insurers are spending up to 100 billion pounds ($125 billion) on Britain's economy after their capital rules were eased, Bank of England Deputy Governor Sam Woods said on Wednesday.

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14 Sep 2023

Britain is rolling back capital rules for insurers from later this year and the industry has said this would make available up to 100 billion pounds to invest in infrastructure, but some lawmakers have doubts this will actually be the case.

«I think it may happen, but I can't guarantee it,» Woods told a sub-committee of parliament's Treasury Select Committee.

The finance ministry overrode the Bank of England to ease some capital rules more than Woods had wanted, which could make an insurance company failure more likely.

Lawmakers asked Woods if the central bank could monitor investments to ensure the extra money does not end up being used to pay dividends to shareholders or buy overseas assets instead.

Woods said it would be beyond the BoE's remit to direct insurers to allocate investments and it was up to government to monitor how the