aged over 55. equity release mortgages give older people the opportunity to unlock this wealth as an alternative to moving into a cheaper house. one motivation may be to pass on wealth to children, who otherwise may not inherit until well past the most expensive child - rearing years. other motivations can include supplementing pension income, repaying debt and making home improvements. the risks in this market though are very different to those on insurer ’ s other assets. it is a retail product bringing conduct risks that fall under the fca ’ s responsibilities. from a prudential perspective, the main risk is long - term stagnation in uk house prices. economically, the no - negative - equity guarantee is a written option on house prices. where insurers have recently entered the market and / or are growing their loanbooks rapidly, the average expected maturity of these options is likely to be some decades in the future. low loan - to - value ratios mean the short - run risks to insurers are limited. they can ride out a property market crash as long as the market subsequently recovers. but loan - to - value ratios increase over time unless house price growth keeps pace with the rate at which interest is accruing. so what you have is a sort of race to the value of the property illustrated by chart 3. the time it takes for the value of the loan to exceed the value of the property will be governed by : the interest rate charged ( higher is more risky ), the loan - to - value ratio ( higher is more risky ), house price inflation ( lower is more risky ) and the age of the borrowers ( younger is more risky ). underwriting standards do appear to have weakened a little over recent years. chart 4 shows a slight increase in the share of lending to younger customers, aged 65 or younger. average loan - to - value ratios for these borrowers have also increased a little. we would expect risk functions to be monitoring these trends and keeping boards informed. as well as loosening of lending standards, another concern might be if insurers are making more loans outside those standards. chart 5 plots loan - to - value ratios against age for equity release mortgages sold by life insurers in 2017. the pink swathe shows insurers ’ risk limits. the great majority of mortgages are within risk appetites, but some loans exceed the limits. this may or may not be a problem. for example, it could

. on the latter, the fight against climate change, disclosure and standardization are key elements to close the data gaps and ensure adequate incentives for corporates. i therefore consider that disclosure should become mandatory, at least as a first step for financial institutions, as it is already in france, and for large corporates. ensuring consistency and comparability of disclosure around the world is essential, and relevant authorities, including sometimes the ones we are not so used to talk to as central bankers or supervisors, need to converge on these new challenges. in that context of extended need for cooperation and coordination among regulators and supervisors, my last comment is related to the levers at hand to promote trust and reliance on foreign supervisors to prevent the development of a trend towards ring fencing and the risk of market fragmentation. let me say first that i don ’ t think that promoting mutual trust and reliance among supervisors can move us to a world free of ring fencing. this is because it has its root and it is the result of the trade - off each regulator and supervisor has to face, in normal time and during crisis, between the need to preserve the stability of financial intermediaries or the financial system as a whole for which it is accountable and the need to preserve their competitiveness through their integration to the global financial system. for instance, for banks with cross - border activities, regulators and supervisors need to balance requirements for pre - positioning of capital and liquidity in their jurisdiction and the need to leave to those banks enough flexibility in the management of those resources at group level. and this without mentioning the development of idiosyncratic financial stability risk which might call for macroprudential approach and specific additional capital requirements at a country level, and might add to the complexity to maintain this delicate balance. what we can do rather is to better use the levers we have at hand to facilitate convergence among regulators and supervisors in the way to address this trade - off, so as to limit ring fencing and prevent a race to the bottom in that area and the resulting market fragmentation : - the first lever is the agreement to and implementation of internationally agreed regulatory standards. hence the importance for instance at the current juncture of the fair and complete 2 / 3 bis central bankers'speeches implementation of basel 3. hence also the importance of ensuring that national regulatory frameworks do not diverge unduly beyond internationally agreed standards and remain equivalent, the importance of the commitment of regulators and supervisors to such convergence, and also the importance of efficient processes to