Nugget: Nick Hoek (Delta Lloyd CEO) on risk and interest rate

From the new years speech of Delta Lloyd CEO Nick Hoek:

“Niek Hoek therefore made a plea for a different approach to risks and interest rates. The interest rates on government bonds are no longer risk-free and are often not realistic either. The effects of discounting provisions at ultra low interest rates undermine the trust in financial stability. And this is unnecessary: “It is fairly easy to restore trust. Namely by switching over to more realistic interest rates. Interest rates that take account of a certain liquidity premium, in line with Solvency II.” The positive effects of this approach will help to reduce the uncertainty and reverse the negative spiral, said Niek Hoek.

Courage is also needed to give the euro our unconditional backing. Saving the euro is key. “We must accept the consequences of a single currency. We need greater political unity, a common fiscal policy, and the transfer of financial powers to a single euro authority.” Political leaders should be given sufficient room to take the action required to save the currency. Hoek stressed that there was no alternative. Without the euro, Europe will be plunged into a recession lasting many years.”

See full press release

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