Should the insurance industry be banking on risk escalation for solvency II?

Basel II introduced a three pillar approach which concentrated upon new capital ratios (Pillar I), new supervisory procedures (Pillar II) and demanded better overall disclosure to ensure effective market discipline and transparency. Importantly, it introduced operational risk as a standalone area of the bank which for the first time was required to be measured, managed and capital allocated to calculated operational risks. Concurrently, Solvency II regulation in the insurance industry was also re-imagining regulations within the insurance industry and also developing operational risk measures. Given that Basel II was first published in 2004 and Solvency II was set to go live in January 2014. This paper analyses the strategic challenges of Basel II in the UK banking sector and then uses the results to inform a survey of a major UK insurance provider. We report that the effectiveness of Basel II was based around: the reliance upon people for effective decision making; the importance of good training for empowerment of staff; the importance of Board level engagement; and an individual's own world view and perceptions influenced the adoption of an organizational risk culture. We then take the findings to inform a survey utilizing structural equation modelling to analyze risk reporting and escalation in a large UK insurance company. The results indicate that attitude and uncertainty significantly affect individual's intention to escalate operational risk and that if not recognized by insurance companies and regulators will hinder the effectiveness of Solvency II implementation

lincRNAs act in the circuitry controlling pluripotency and differentiation

Although thousands of large intergenic non-coding RNAs (lincRNAs) have been identified in mammals, few have been functionally characterized, leading to debate about their biological role. To address this, we performed loss-of-function studies on most lincRNAs expressed in mouse embryonic stem (ES) cells and characterized the effects on gene expression. Here we show that knockdown of lincRNAs has major consequences on gene expression patterns, comparable to knockdown of well-known ES cell regulators. Notably, lincRNAs primarily affect gene expression in trans. Knockdown of dozens of lincRNAs causes either exit from the pluripotent state or upregulation of lineage commitment programs. We integrate lincRNAs into the molecular circuitry of ES cells and show that lincRNA genes are regulated by key transcription factors and that lincRNA transcripts bind to multiple chromatin regulatory proteins to affect shared gene expression programs. Together, the results demonstrate that lincRNAs have key roles in the circuitry controlling ES cell state.Broad InstituteHarvard UniversityNational Human Genome Research Institute (U.S.)Merkin Family Foundation for Stem Cell Researc

Finishing the euchromatic sequence of the human genome

The sequence of the human genome encodes the genetic instructions for human physiology, as well as rich information about human evolution. In 2001, the International Human Genome Sequencing Consortium reported a draft sequence of the euchromatic portion of the human genome. Since then, the international collaboration has worked to convert this draft into a genome sequence with high accuracy and nearly complete coverage. Here, we report the result of this finishing process. The current genome sequence (Build 35) contains 2.85 billion nucleotides interrupted by only 341 gaps. It covers ∼99% of the euchromatic genome and is accurate to an error rate of ∼1 event per 100,000 bases. Many of the remaining euchromatic gaps are associated with segmental duplications and will require focused work with new methods. The near-complete sequence, the first for a vertebrate, greatly improves the precision of biological analyses of the human genome including studies of gene number, birth and death. Notably, the human enome seems to encode only 20,000-25,000 protein-coding genes. The genome sequence reported here should serve as a firm foundation for biomedical research in the decades ahead