A trade repository could help shine a light on the invisibility of insurers who lend their securities to other financial institutions, Bank of England Deputy Governor for Financial Stability Paul Tucker said on Tuesday.

The Bank becomes the main regulator for insurers like Aviva and Prudential from next year when the Financial Services Authority will be scrapped as part of a shake up of UK financial supervision.

Tucker said there was a potential for insurance firms to build in-house shadow banks -- a reference to lightly regulated entities that handle credit -- through their securities lending business.

The Bank wants, in line with our traditions, to find market-led solutions where we can, Tucker told a group of insurance industry top officials.

One issue is transparency. Maybe we should at least contemplate introducing a trade repository. If we are moving towards greater transparency in derivative markets, why not do so in a core financing market, Tucker said.

Tucker also said the Bank was dismayed by the costs insurers face to comply with planned European Union insurance capital rules, known as Solvency II, from 2014.

We are also concerned that ... it risks being too complicated in its desire to introduce a 'risk sensitive' regime, Tucker said.

(Reporting by Huw Jones, Editing by Fiona Shaikh)