Summary of the impact

Work on financial stability from 2002 to 2008 by Davis (Brunel 2000 to date), Barrell, (NIESR to 2011, Brunel from 2011) and Karim (Brunel staff from 2007) led in 2008 to the Financial Services Authority commissioning a report on the optimal regulation of bank capital and liquidity. The objective was to establish the optimal percentage increase in capital and liquidity ratios that would reduce the probability of financial crises to acceptable levels. It produced a recommendation that capital should be increased by 4 per cent, and this result was adopted by the G10 Central Bank Governors and the Bank for International Settlements in Basel as the core basis for changes in regulation.

Summary of the impact

The Coalition government's manifesto commitments to remove compulsion in the annuity market necessitated a decision about a Minimum Income Requirement (MIR). Cannon's contribution to the government consultation played a significant role in setting the MIR. Previous research by Cannon had shown that the UK compulsory-purchase annuity market was efficient because compulsion expanded market size (more than half of all annuities are sold in the UK) and reduced selection effects. This research enabled the government to justify retaining an element of compulsion. The precise level of the MIR used in the 2011 Finance Bill was based upon the methodology proposed by Cannon.

Summary of the impact

This case study focuses on IOE research that played a pivotal role in the establishment of the last Labour government's Child Trust Fund, the world's first universal children's savings scheme. The fund benefits UK children born between 2002 and 2011. Its designers aimed to ensure that every young person had some savings at age 18. The scheme was scrapped by the coalition government in January 2011 and replaced with Junior ISAs. However, it has left a very substantial legacy — in the form of nest eggs for six million children that will hatch when they reach their 18^th birthday. Between 2020 and 2029, they will gain access to funds that had already amounted to £4.8 billion by May 2013¹.