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This half-day workshop, held in the context of the International risk Management Conference co-organized by the New York University Stern Salomon Center for the Study of Financial Institutions and the University of Florence, will explore the increasingly intertwined nature of risk management processes and regulation. The focus will be put on the practitioners perspective.
The workshop will thus come to grips with the interplay of regulation and risk management in a period where risk assessment methodologies are becoming increasingly complex and the regulatory and supervisory framework of the financial sector is getting more intrusive (e.g. increasing monitoring of business models of FIs; additional capital buffers: new powers for resolution authorities on early intervention and resolution planning).
Some of the key questions which the workshop is likely to address are the following:

• Should financial stability be achieved through activist supervision or should legislators and regulators rely on the production of limited yet credible rules?

• Do regulators have the administrative and resource capacity to actively supervise financial institutions’ conduct, including internal risk management processes and business models?

• Knowing the excessive risk-taking that characterised the financial industry in the past and the un-encouraging effectiveness of self-regulation, does the alternative, light-weighted regulatory approach still has a future?

• Last, but not least, how can risk managers deal with regulatory risk in the financial sector?

The workshop will bring together both bank and non-bank actors to illustrate, analyse and engage with those challenges.

Download the paper that followed the speech

RECORDING OF THE EVENT

Agenda

16:30 | Introduction by Vincenzo Grassi, EUI Secretary General and Brigid Laffan, RSCAS EUI

16:50 | Introduction by Andrea Simoncini, UNIFI and Fondazione CR Firenze

17:00 | Lecture by Patrick Honohan “Central Banking in Europe today: Over-mighty or Under-powered”

17:45 | Q&A, moderated by Giorgia Giovannetti, UNIFI and EUI

18:30 | Reception for all participants

Abstract

The ECB and other European Central Banks have never looked so powerful. They have driven interest rates below zero and purchased trillions of euros of government and other bonds. They have become more active in bank supervision – a function now also centralised for the euro zone in the ECB. Moreover, a much broader toolkit than used in past decades is being energetically employed. Having tested the limits of their mandates, the ECB and other European Central Banks are now unlikely to return to the light touch policy of the 1990s. However, some puzzles remain:

• Why is inflation in the euro area – the main statutory objective of the ECB – still below target?
• Why were these tools not employed earlier in the crisis?
• Is there more that could be done now, such as “helicopter money”; and if so, should it be used?

This lecture will explain how the crisis has gradually drawn the ECB into policy areas and instruments for which its mandate is less explicit, though no less real. The Frankfurt-based Bank has, in the past ten years, changed more than most central banks. Like other major central banks, it has had to innovate in response to developments in globalization, in commodity price fluctuations and in unusually large fiscal deviations. But in doing so the ECB has been faced with unique challenges of political legitimacy as well as of economic analysis in the multi-country currency union.

Speaker

Patrick Honohan
Honorary Professor of Economics at Trinity College Dublin; Nonresident Senior Fellow at the Peterson Institute for International Economics
Former Governor of the Central Bank of Ireland

Patrick Honohan was Governor of the Central Bank of Ireland and a member of the Governing Council of the European Central Bank from September 2009 to November 2015. He is an honorary professor of economics at Trinity College Dublin and a nonresident senior fellow at the Peterson Institute for International Economics, Washington, DC. Previously he spent twelve years on the staff of the World Bank where he was a Senior Advisor on financial sector issues. During the 1990s he was a Research Professor at Ireland’s Economic and Social Research Institute. In the 1980s he was Economic Advisor to the Taoiseach (Irish Prime Minister) Garret FitzGerald. He also spent earlier spells at the Central Bank of Ireland and at the International Monetary Fund. A graduate of University College Dublin, he received his PhD in Economics from the London School of Economics in 1978. He has taught economics at the London School of Economics, at University College Dublin and as a visitor to the University of California San Diego and the Australian National University as well as at Trinity College Dublin. He was elected a member of the Royal Irish Academy in 2002.

Abstract

In her speech, Sabine Lautenschläger argues that, in a well-functioning banking sector, banks must be able to fail. It is key, however, that they can do so in an orderly manner without destabilizing the entire banking system. Against that backdrop, Ms Lautenschläger discusses the role of the supervisor within the European framework for bank resolution. She also sheds light on the importance of the upcoming European stress test for supervisors’ assessments of banks’ resilience.

The event will be in Italian and English, simultaneously translated.

Agenda

16:35 | Opening remarks by Giuseppe Morbidelli (President, Fondazione CESIFIN Alberto Predieri)

16:40 | Presentation of the FBF and the speaker by Elena Carletti (Scientific Director, Florence School of Banking and Finance)

16:45 | Lecture by Sabine Lautenschläger (Member of the Executive Board and Vice-Chair of the Supervisory Board of the ECB): ‘The banks and the market’

17:30 | Questions and answers with the public, moderated by Emilio Barucci (Full professor of Financial Mathematics, Polytechnic University of Milan)

18:00 | Closing remarks by Vincenzo Grassi (Secretary General, European University Institute) and Giuseppe Rogantini-Picco (Member of the Board, Fondazione CR Firenze)

18:10 | Cocktail for all participants

Speaker

Member of the Executive Board & Vice-Chair of the Supervisory Board of the European Central Bank

Sabine Lautenschläger, born in 1964, studied law in Bonn. After passing the second state examination in law, she joined the Bundesaufsichtsamt für das Kreditwesen (BAKred – Federal Banking Supervisory Office), which later became the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin – Federal Financial Supervisory Authority). In the course of her career at BAKred/BaFin, she held several management positions before being appointed BaFin’s Chief Executive Director of Banking Supervision in 2008. Later, in 2011, she additionally was Member of the Management Board and Board of Supervisors of the European Banking Authority (EBA) in London. In 2011 Sabine Lautenschläger moved to the Deutsche Bundesbank, serving as Vice-President until January 2014 when she was appointed to the Executive Board of the European Central Bank. As Member of the Executive Board she is also Member of the Governing Council which is responsible for the Monetary Policy in the Euro Area. Since her appointment as Vice-Chair of the Supervisory Board of the Single Supervisory Mechanism (SSM) in February 2014, she has also been in charge of ECB Banking Supervision. She represents ECB Banking Supervision in the Basel Committee on Banking Supervision and in the Financial Stability Board Plenary.

EVENT CO-ORGANISED WITH

Fondazione CESIFIN Alberto Predieri

Fondazione CR Firenze

Participation to this event is upon invitation only

This closed-doors, two-days Chatham House executive seminar on Financial Surveillance will (1) take stock of the state of the art in the supervision and resolution of banks and other non-bank actors in Europe; (2) will assess the market impact and developments of the recently implemented prudential and resolution rules and will (3) critically review current oversight gaps and risks and explore possible remedies. Compared to past editions which focussed on the banking sector, this executive seminar will look both at banks and non-banks realities.

The executive seminar will be held in the context of the Florence School of Banking and Finance’s 4th Advisory Council and Scientific Committee Meeting.

Scientific organisers:

• Stefano Cappiello | Bank of Italy
• Elena Carletti | Florence School of Banking and Finance and Bocconi University
• Pierre Schlosser | Florence School of Banking and Finance
• Emiliano Tornese | European Commission

Participation to this event is upon invitation only

This two-days Chatham House executive seminar on the New World of Financial Stability will (1) take stock of the state of the art in the regulation and supervision of banks and other nonbank actors in Europe; (2) assess the market impact of and developments in the Single Market for banking and finance; (3) discuss risks and opportunities stemming from new technologies and business models and (4) critically review current oversight gaps and risks and explore possible remedies.

In line with last year’s approach, this Florence School of Banking and Finance (FBF) executive seminar will look both at banking and non-banking entities.

The executive seminar will be held in the context of the Florence School of Banking and Finance’s 4th Advisory Council and Scientific Committee Meeting.

Scientific organisers:

• Stefano Cappiello (FBF and Italian Treasury)
• Elena Carletti (FBF and Bocconi University)
• Pierre Schlosser (FBF)
• Emiliano Tornese (FBF and European Commission)
• Tobias Troeger (Frankfurt University)