"Core capital is defined by law and debt is not among the ways to raise it... retained earnings, paid in capital, issuance of common stock or insurance of noncumulative preferred stock. That’s it. "
RuudG,
Core capital needs to be understood in the context of depository institutions like banks where run on the bank is a every day reality.
FnF are monoline insurance companies and there is no possibility of run on FnF. As long as FnF manage their risks, liquidity and their obligations then it does not matter how it is financed.
Core capital is concrete life jackets forced on FnF by the loan sharks.
Do the other insurance companies maintain any core capital? Proof is more than the 10 years of conservatorship during which FnF are deeply deficit in core capital and supported by the SPS credit line. What is wrong if the same arranged is continued after conservatorship until FnF build their capital. BTW it is FHFA which robbed FnF of their capital.
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