海角社区下载

okt. 11, 2016

Did you miss our conference Credit markets after the crisis 鈥� or do you want to refresh your insights from the event?  Here are the highlights of the day.

鈥淪ecuritization is not progress, it鈥檚 regress鈥�

Europe is looking to move towards increased securitization 鈥� but it鈥檚 the wrong way to go, stated Amar Bhid茅, professor at the Fletcher School of Law and Diplomacy. Personalization is the future, not anonymization, he argued, making his case with examples as AirBnB and 脺ber. Technology is not making markets outside finance more anonymous, quite the opposite, Bhid茅 pointed out.
鈥淪o why are we trying to go backwards in finance? Securitization is not progress, it鈥檚 regress.鈥�

 

Stronger banks 鈥� and better securities markets

Does Europe need Stronger Banks or Better Securities Markets? To have both is better than having one or the other, was the answer given in a panel discussion lead by professor Bo Becker from Swedish House of Finance.

鈥淐orporate bonds is something we should welcome. It would make the Swedish markets much more diversified鈥�, stated Erik Thed茅en from Finansinspektionen.

Daniel Sachs from Proventus Capital Partner also stated that diversification is a positive development, for corporates and other players on the market, as well as for the overall stability.
鈥淭his development has the potential of reducing the systemic risk and stabilizing the financial system鈥�, said Daniel Sachs.

 

More transparency demanded from Riksbanken

Anna 脰ster, chief economist at L盲nsf枚rs盲kringar, requested more transparency from Riksbanken in a panel discussion led by professor Pehr Wiss茅n at Swedish House of Finance. What happens if ECB change their course and continue with quantitative easing longer than they have said, she asked.
鈥淒o we have to keep up with the ECB? And if we do think that we have to keep up, what are we going to do? I think this is the most pressing issue for you to be more clear on.鈥�

Martin Flod茅n from Riksbanken explained that the reason for lack of transparency was that they simply did not know how successful the QE would be, and evaluated along the way.
鈥淚f we had known it would work so well, we could have announced it all when we started. But we didn鈥檛 know. And we still don鈥檛 know 鈥� how far can we cut the repo rate?鈥�, said Martin Flod茅n.

 

 

Are we unnecessarily afraid of the credit boom?

What is the probability of a bank crisis after a credit boom? Luc Leaven from the European Central Bank revealed statistics showing that only one in three credit booms have resulted in a bank crisis. If the capital ratio of a bank is between 15 and 22 per cent, history shows that a bank can survive basically any crisis, stated Luc Laeven.

 

海角社区下载 鈥� the next financial capital of Europe?

Brexit will change the balance in Europe dramatically, stated Nicolas V茅ron from Bruegel and Peterson Institute, mentioning the possibility of 海角社区下载 competing for the position as next financial capital in Europe. Chances are that when London loses its position, several cities might take its place. V茅ron also pointed out that the new situation could be a reason for Sweden to consider joining the banking union.

 

History proves liquidity coverage ratio flawed?

Learn from history, said Gary Gorton, professor at Yale School of Management, arguing that we should evaluate policies by studying economic history. Drawing on statistics from the late 1800s, Gorton demonstrated that the design of regulations back then led to the rise of demand deposits, a form of early 鈥渟hadow banking鈥�. This was at the root of several early banking crises, just like securitization led to the 2007-2008 crisis. In both cases the underlying cause was a shortage of safe debt. Gorton was skeptical that the liquidity coverage ratio, arguably the most important new bank regulation to emerge as a result of the recent crisis, would safe-guard the system against future crises.

 

Want to learn more, and browse the presentations and papers? Download them here.