Insurance for Financial Crisis?

Faure Michael (Erasmus University Rotterdam)
Heine Klaus (Erasmus University Rotterdam)

Abstract: With the financial crisis, the amount of subsidies provided by government has increased considerably. To some extent, the financial crisis could be considered as comparable to a natural catastrophe in the sense that a quick intervention by government is necessary. Therefore, a goal of this contribution is to address whether there is an integrative legal and economic framework to analyse this type of financial intervention by governments in crisis situations. We will more particularly argue that the economic approach towards compensation of victims in case of natural catastrophes can also provide an important contribution to the interventions of a government during the financial crisis. It is more particularly striking that in case of natural catastrophes to an important (and increasing) extent, still a large whole is played by insurance. We argue that also for risks emerging from the financial crisis, insurance may provide an attractive solution.

Download the paper