The new capital and liquidity rules for banks (Basel III) and the new capital requirements for insurance companies (Solvency II) are set to be introduced in January 2013. Since insurers are major institutional investors – in bank bonds, among other things – there may well be some reciprocal effects between these two sets of regulations when they are implemented. As a principle, Solvency II gives preferential treatment to bonds with good credit ratings and short maturities. The new Basel III liquidity requirements oblige banks to place their funding on a more stable, long-term footing. As a consequence, these institutions will have to issue more – and different – long-term bonds. At first glance, this appears to be diametrically opposed to the incentives that Solvency II creates for insurance companies. A closer look at the main types of investors in bank bonds and the various incentives that will affect the investment decisions made by insurers however reveals that there will be changes in asset allocation, but the disintegration of a whole investor base is not expected. Nonetheless, the precise nature of the reciprocal effects between Basel III and Solvency II should be examined before these rules are finally adopted.