FABS in expanded financial accounts In order to better understand the dynamics of the FABS market collapse during the financial crisis and, more generally, to monitor this financing market in the future, the EFA project provides FABS data both at a higher frequency and with greater granularity than the data reported in the financial accounts. In particular, the EFA project provides daily data on the three main types of FABS problems: FABN with fixed maturities greater than 397 days (Figure 2), FABN with fixed maturities of 397 days or less (Figure 3) and FABN with integrated selling options such as XFABN (Figure 4). In addition, the EFA project provides quarterly data on FABCP (Figure 5). As shown in Figure 6, fabn accounts for the majority of exceptional FABS maturities with longer maturities. However, a closer look at the underlying data shows that it was a snack on XFABN from the summer of 2007, causing the severe and sudden contraction of FABS funding during the financial crisis. Conclusion This EFA project provides FABS data on a daily basis and at a more detailed level than the one shown in the financial accounts. This additional detail about FABS can be used to gain a deeper understanding of several important financial relationships in the U.S. economy. First, the data, by type of security, show that there was a shift on XFABN in the third quarter of 2007, which is difficult to identify in the aggregated data. Second, the daily frequency of FABS data helps determine when markets are disrupted in the short term, as in 2007, and improves our understanding of financing pressure during the recent financial crisis and in the future. Finally, the fabs data give an overview of the substitution within the asset classes: when FABS financing was stained during the financial crisis, life insurers turned, for example, to the shorter duration FABS and the FHLB system to alleviate cash flow difficulties. In the future, the availability of daily data on the different types of FABS will allow for continuous monitoring of this important and seemingly growing financing market.
Disaster financing cannot be easily accessible to other insurers who lack the flexibility of a Class A financial power rating and a strong capitalization that CSAA Insurance Exchange holds due to credit issues and/or regulatory restrictions. Parental capital inflows in the form of cash and surplus notes are perhaps the most widely used instruments. In recent years, real estate insurers in Florida have carried out both types of capital raisings to support the surplus in response to disasters and/or the concerns of rating agencies. Citizens Property Insurance Corp. of the state issued bonds prior to the occurrence to close the gap between claims paid by policyholders and clawback benefits. Voya Retirement, a member of the Federal Home Loan Bank of Boston, has awarded financing contracts for spread-lending purposes in the form of deposit contracts. The company said it took advantage of the proceeds by earning income from invested assets in excess of the amount credited with no administrative fees.