IDEAS home Printed from https://ideas.repec.org/p/hhb/hanken/0532.html
   My bibliography  Save this paper

The Impact of New Capital Requirements on the Portfolio Decisions of Finnish Pension Institutions

Author

Listed:
  • Sjöholm, Hans-Kristian

    (Swedish School of Economics and Business Administration)

Abstract

This paper examines the potential impact of new capital requirements on asset allocations of Finnish pension institutions. We describe the new requirements and consider portfolio construction to minimize regulatory capital, given the investor’s preferred level of expected return. Results identify portfolio transactions that enhance expected return without increasing capital needs. Regulation calls for portfolio diversification and prudence in management, but this paper shows that market participants can exploit inconsistencies in regulation. Possible future consequences include capital outflows from the pension system and an unintended decrease in pre-funding of old-age pensions.

Suggested Citation

  • Sjöholm, Hans-Kristian, 2007. "The Impact of New Capital Requirements on the Portfolio Decisions of Finnish Pension Institutions," Working Papers 532, Hanken School of Economics.
    • Handle: RePEc:hhb:hanken:0532
    as

    Download full text from publisher

    File URL: http://openax.shh.fi:8180/dspace/bitstream/10227/257/1/532-978-951-555-968-5.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Johansson, Edvard & Böckerman, Petri & Kiiskinen, Urpo & Heliövaara, Markku, 2007. "The Effect of Obesity on Wages and Employment: The Difference Between Having a High BMI and Being Fat," Working Papers 528, Hanken School of Economics.
    2. Rokkanen, Nikolas, 2007. "With Good Reputation Size Does not Matter: Issue Frequency and the Determinants of Debt Maturity," Working Papers 522, Hanken School of Economics.
    3. Böckerman, Petri & Johansson, Edvard & Jousilahti, Pekka & Uutela, Antti, 2007. "The Physical Strenuousness of Work is Slightly Associated with an Upward Trend in the Body Mass Index," Working Papers 523, Hanken School of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wägar, Karolina & Björk, Peter & Ravald, Annika & West, Björn, 2007. "Exploring Marketing in Micro Firms," Working Papers 531, Hanken School of Economics.
    2. Strandvik, Tore & Holmlund, Maria & Edvardsson, Bo, 2008. "Customer Needing - Conceptualising Industrial Service from a Customer Perspective," Working Papers 536, Hanken School of Economics.
    3. Niklas Ahlgren & Mikael Juselius, 2012. "Tests for cointegration rank and the initial condition," Empirical Economics, Springer, vol. 42(3), pages 667-691, June.
    4. Kulp-Tåg, Sofie, 2007. "An Empirical Comparison of Linear and Nonlinear Volatility Models for Nordic Stock Returns," Working Papers 525, Hanken School of Economics.
    5. Segercrantz, Beata, 2007. "Constructing Stability in Software Product Development during Organizational Restructurings," Working Papers 527, Hanken School of Economics.
    6. Greve, Jane, 2008. "Obesity and labor market outcomes in Denmark," Economics & Human Biology, Elsevier, vol. 6(3), pages 350-362, December.
    7. Giorgio Brunello & Pierre-Carl Michaud & Anna Sanz de Galdeano, 2008. "The Rise in Obesity Across the Atlantic: An Economic Perspective," Working Papers 2008-21, FEDEA.
    8. Wada, Roy & Tekin, Erdal, 2010. "Body composition and wages," Economics & Human Biology, Elsevier, vol. 8(2), pages 242-254, July.
    9. Böckerman, Petri & Johansson, Edvard & Kiiskinen, Urpo & Heliövaara, Markku, 2010. "Does physical capacity explain the height premium?," MPRA Paper 20108, University Library of Munich, Germany.
    10. Brunello, Giorgio & Michaud, Pierre-Carl & Sanz-de-Galdeano, Anna, 2008. "The Rise in Obesity across the Atlantic: An Economic Perspective," IZA Discussion Papers 3529, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    finnish pension system; solvency; portfolio; optimization; regulatory; arbitrage;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhb:hanken:0532. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Staffan Dellringer (email available below). General contact details of provider: https://edirc.repec.org/data/shhhhfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.