THIS SEMINAR IS PART OF THE FBF BANK BOARD ACADEMY FOR NON-EXECUTIVE DIRECTORS

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Sustainability is at the core of the EU green agenda and global concerns to preserve natural resources, with the objective to reach net-zero by 2050. Sustainability – in its environmental, economic, and societal dimensions – raises key challenges for public and private actors alike. They need to transform their approach, find the right instruments and policies, comply with new standards and rules (e.g. taxonomy, disclosures), and answer a strong demand from society. Banks and investors can find opportunities in revisiting their strategy, business models, and products within sustainable finance while ensuring business resilience. Central Banks are also actively examining the challenges and opportunities of sustainability for their [monetary policy, financial stability, and supervisory] functions. Both innovation and investment are critical to ensure climate change mitigation and transition.

This online debate will ask:

• What are the challenges and opportunities in integrating sustainability concerns in operational activities and strategies for banks, central banks, and investors?
• Should sustainability be a strategic priority?
• How can sustainability requirements be aligned with the interests of investors, shareholders, and generally EU financial end-users? Is this long-term objective compatible with short-term interests?
What are the instruments in central banks’ policy toolkit to address sustainability challenges?
• What can be the role of independent board members in ensuring sustainability in the bank’s business model and strategies?
• What are the main elements that bank board members should look at in order to foster sustainability? Are there instruments to support boards in their actions?

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Chair

Thorsten Beck (The Business School (formerly Cass) and Florence School of Banking and Finance, European University Institute)
Thorsten Beck is currently professor of banking and finance at The Business School (formerly Cass) in London. He is also a research fellow of the Centre for Economic Policy Research (CEPR) and the CESifo. He was professor of economics from 2008 to 2014 at Tilburg University and the founding chair of the European Banking Center there from 2008 to 2013. Previously he worked many years in the research department of the World Bank and has also worked as consultant for – among others – the European Central Bank, the Bank of England, the BIS, the IMF, the European Commission, and the German Development Corporation. He is also a member of the Advisory Scientific Council of the European Systemic Risk Board (ESRB) and is co-editor of the Journal of Banking and Finance. His research, academic publications and operational work have focused on two major questions: What is the relationship between finance and economic development? What policies are needed to build a sound and effective financial system? Recently, he has concentrated on access to financial services, including SME finance, as well as on the design of regulatory and bank resolution frameworks. In addition to numerous academic publications in leading economics and finance journals, he has co-authored several policy reports on access to finance, financial systems in Africa and cross-border banking. His country experience, both in operational and research work, includes Albania, Bangladesh, Bolivia, Brazil, China, Colombia, Egypt, Malaysia, Mexico, Peru, Russia and several countries in Sub-Saharan Africa. In addition to presentation at numerous academic conferences, including several keynote addresses, he is invited regularly to policy panels across Europe. He holds a PhD from the University of Virginia and an MA from the University of Tübingen in Germany.  

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Speakers

Luiz Awazu Pereira da Silva (Deputy General Manager Bank for International Settlements)
Luiz Awazu Pereira da Silva became Deputy General Manager on 1 October 2015. Before joining the BIS, Mr Pereira da Silva, a Brazilian national, had been Deputy Governor of the Central Bank of Brazil since 2010. Prior to that, he worked in various positions for the World Bank in Washington DC, Tokyo and southern Africa. He also served as Chief Economist for the Brazilian Ministry of Budget and Planning, and as Brazil’s Deputy Finance Minister in charge of international affairs.

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Belén Romana (Non Executive Director, Santander, Aviva and SIX Group.)
Appointed to the board of Aviva plc on 26 June 2015. Belén is a highly respected former senior Spanish civil servant. In 2000 she was promoted to Director General for Economic Policy, with responsibility for coordinating macroeconomic and microeconomic policy across several industry sectors. In 2003 she was appointed Head of the Spanish Treasury, reporting directly to the Minister of Economy and Finance. She has a significant knowledge of financial services, including insurance and regulation, and a broad European experience working with European Commission, the International Monetary Fund (IMF), the European Central Bank (ECB), and the Organisation for Economic Co-operation and Development (OECD). Belén was formerly President and Chairman at Sareb (asset management company), where she managed various stakeholders with interests in Spain’s economic stability across Europe; Secretary General at Círculo de Empresarios; and Strategy and Corporate Development Director at ONO (telecommunications company) with responsibility for investor relations, risk management and the internal audit departments. She has also held Non-Executive positions at Ageas (insurance), Acerinox (stainless steel manufacturing conglomerate) and Banesto (banking). Belén is currently an independent Non-Executive Director of Banco Santander (banking) and is a member of the advisory board of the Foundation Rafael del Pino and co-chair of the Global Board of Trustees of The Digital Future Society.

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Axel A. Weber (Chairman of the Board of Directors, UBS Group AG)
Axel A. Weber has been Chairman of the Board of Directors of UBS since 2012. He is chairman of the Institute of International Finance, a board member of the Swiss Bankers Association and a member of the Group of Thirty as well as the Trilateral Commission, among others. Mr. Weber was president of the German Bundesbank between 2004 and 2011, during which time he also served as a member of the Governing Council of the European Central Bank, a member of the Board of Directors of the Bank for International Settlements, German governor of the International Monetary Fund and as a member of the G7 and G20 Ministers and Governors. Mr. Weber’s academic career includes professorships at the Universities of Cologne, Frankfurt / Main, Bonn and Chicago. He holds a PhD in economics from the University of Siegen, where he also received his habilitation.

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This seventh online seminar takes place in the framework of the Challenges for Bank Board Members series, which aims at building a community of professionals from the banking and finance industry interested in deepening their knowledge about bank boards’ functioning and learning how to challenge bank management effectively. Seminar speakers include an international faculty of regulators, supervisors, and academics together with bank and finance professionals. The Challenges for Bank Board Members series is part of the new FBF Bank Board Academy for Non-Executive Directors.

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The first event of the #FBFDiscuss! series will develop around the motion: “This house believes that the ECB should include climate change mitigation within its mandate.”

Greening the mandate of the European Central Bank (ECB) is intensely debated in policy and academic circles, also in the context of its monetary policy strategy review, with results expected later in 2021. The political, economic, and legal room for manoeuvre is questioned to address the challenges posed by climate change mitigation within the central bank’s mandate. Is the ECB mandate fit for green purposes? Could the operational framework of monetary policy contribute to broader EU policies to fight climate change?

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Proponent

Dirk Schoenmaker, Professor of Banking and Finance at the Rotterdam School of Management.

Dirk Schoenmaker is a Professor of Banking and Finance at the Rotterdam School of Management, Erasmus University and Director of the Erasmus Platform for Sustainable Value Creation. He is also a Fellow at the think tank Bruegel. His research covers the fields of sustainable finance, central banking, financial supervision and European banking. Before joining RSM, Dirk worked at the Dutch Ministry of Finance and the Bank of England. Dirk is (co-)author of Principles of Sustainable Finance (OUP), Financial Markets and Institutions: A European Perspective (CUP) and Governance of International Banking: The Financial Trilemma (OUP).

Opponent

Hans-Peter Gruener, Professor of Economic Policy at the University of Mannheim.

Hans Peter Grüner is Professor of Economics, Economic Policy at the University of Mannheim. His research focuses on the design of political and economic institutions (mechanism design), European financial and monetary policy, political reforms, capital markets and the distribution of wealth.  He has been a consultant to various companies and government institutions including UBS, BMW, the European Commission and the European Central Bank. He is a Research Fellow of CEPR, London and an Adjunct Professor at the Hertie School of Governance in Berlin. Grüner has published in leading international journals, including the American Economic Review, Econometrica, the Economic Journal, the Journal of the European Economic Association, the Journal of Economic Theory and the Journal of Public Economics.

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Moderator

Christy Ann Petit (EUI, FBF) is a Research Associate at the Florence School of Banking and Finance, part of the Robert Schuman Centre at the European University Institute (EUI). Christy recently defended her Ph.D. thesis at the EUI Law Department on ‘An integrated system for banking supervision in the Banking Union’, and previously graduated from the Ecole normale supérieure in law, economics, and management in France (2014), and, in European Law from the College of Europe (2015). During her postgraduate studies, she was an intern at the European Central Bank (Single Supervisory Mechanism) and at the Court of Justice of the European Union (General Court). Her research interests cover European prudential supervision and regulation, monetary policy and central banking in comparative perspectives, and the law of the Economic and Monetary Union. Her latest publications analyse ECB’s accountability and independence (Maastricht Journal of Comparative and European Law, 2019) and the SSM and ECB decision-making governance (Edward Elgar, 2019).  

References

• Dirk Schoenmaker, ‘Greening Monetary Policy’ (2021) 21 Climate Policy 581, link.
• Network for Greening the Financial System (NGFS), Adapting central bank operations to a hotter world – Reviewing some options, Technical document, March 2021, link.

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#FBFDiscuss! is a new Oxford-Union style debate format that will bring together two contestants from academia to debate a specific motion. After the opening statements, the event will see the direct participation of the public who will have the chance to pose their questions and vote for their favourite opinion.

Join the discussion! Follow #FBFDiscuss on Twitter!

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Joint FBF- European Economy Online seminar on Banking and COVID Thursday 20 May (13.00-14.15, CEST)

In collaboration with the EUI’s Department of Economics

The 2021.1 issue of European Economy – Banks, Regulation and the Real Sector discusses the impact of the Covid-19 outbreak on the banking industry and the real economy. The papers assess the supportive role of banks to the recovery and the liquidity of non-financial institutions, the regulatory initiatives adopted to boost credit and support the real sector, the “exit strategy” from the pandemic crisis and emergency policies and contributes to the debate about the future of banks and of a well-developed Capital Market Union in Europe.

Chair and Moderator:
Thorsten Beck, Cass Business School and EUI’s Florence School of Banking and Finance
Introduction:
Giorgio Barba Navaretti, University of Milan
Speakers:

• Loriana Pelizzon, SAFE/Goethe University, University Ca’ Foscari
• José Manuel Campa, European Banking Authority

Concluding remarks:
Giacomo Calzolari, European University Institute

THIS SEMINAR IS PART OF THE FBF BANK BOARD ACADEMY FOR NON-EXECUTIVE DIRECTORS

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Watch the streaming of the event

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Banks have been at the center stage of the intermediary chain since the pandemic outbreak as they were called to provide lending to a frozen economy. Going forward their boards will need to continue steering them to facilitate the recovery and the transformation of the economy towards a more sustainable and more digital advanced modus operandi. In this respect, the Next Generation EU may turn out to be a catalyst for improving the low stagnating profitability of the European banking sector and fostering its restructuring.

Banks’ internal governance and supervisory expectations will be key factors for the European economic transformation. On the one hand, bank boards will have to enhance diversity and expertise in specific new areas such as IT and climate change in addition to enhance their effectiveness. On the other hand, supervisors will be essential in accompanying the new role that banks will play in the economic recovery.

Against this background, the online debate will ask:

• How has banks’ internal governance evolved in recent years and what are the main challenges for the board’s oversight going forward?
• How does the recent evolution in their internal governance allow banks to be better prepared than in 2008 to face the main challenges banks are experiencing?
  • Covid Crisis – Board’s ability to adapt to evolving circumstances – response to the crisis
  • Challenges & acceleration of trends: digitalization, change in customer behaviour, new entrants, profitability, etc.
  • Expertise & diversity enhancement on the Board. Recent trends to broaden the scope of diversity (in terms of gender, expertise, ethnic and racial). Alignment with the strategy and the needs of the Board
• How has banking union benefited from common supervisory practices in the area of governance and how could further harmonisation within the EU be beneficial in this respect? What new supervisory tools may be used going forward to ensure a further enhancement in banks’ board effectiveness?
• How can banks sustain the new European economic recovery? What is the role of banks’ board in this context?
• What role can supervisors play in sustaining the role of banks in the implementation of the Next Generation EU?
• Looking forward, one of the big challenges is climate change. There are increasing demands from stakeholders on ESG matters and, particularly on sustainability. What is the supervisory expectation on climate change? Where should banks and their board focus?
  • Enhancement of the Board’s role to incorporate sustainability in the company’s strategy and business management. Effective oversight on ESG risks and opportunities. Expertise on sustainability issues. Integration of compensation KPIs linked to sustainability.

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Chair

Elena Carletti (Bocconi University)
Elena Carletti is Professor of Finance at Bocconi University. She is also founding director of the Florence School of Banking and Finance Florence School of Banking and Finance at the European University Institute, is a member of Board of Directors of Unicredit SpA and a member of the Advisory Scientific Committee of the European Systemic Risk Board (ESRB). Furthermore, she is research professor at the Bundesbank, a member of the Expert Panel on banking supervision for the European Parliament, a member of the Scientific Committee “Paolo Baffi Lecture” at the Bank of Italy, a member of Bruegel Scientific Committee, Research Fellow at CEPR, Fellow of the Finance Theory Group, CESifo, IGIER, and Wharton Financial Institutions Center. She is the author of numerous articles on Financial Intermediation, Financial Crises and Regulation, Competition Policy, Corporate Governance and Sovereign Debt.

   

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Speakers

Andrea Enria (Chair of the Supervisory Board, European Central Bank)
Mr Andrea Enria took office as second Chair of the Supervisory Board of the European Central Bank in January 2019. Before that he was the first Chairman of the European Banking Authority (EBA) since March 2011. He previously served as Head of the Regulation and Supervisory Policy Department at the Bank of Italy, and as Secretary General of the Committee of European Banking Supervisors (CEBS). He also held the position of Head of Financial Supervision Division at the European Central Bank. Before joining the ECB he worked for several years in the Research Department and in the Supervisory Department of the Bank of Italy. Mr Enria has a BA in Economics from Bocconi University and a M. Phil. in Economics from Cambridge University.

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Carlos Torres Vila (Chairman, BBVA)
Carlos graduated with a B.S. in Electrical Engineering and B.S in Management from MIT (Massachusetts Institute of Technology ) , where he later also earned a M.S at the MIT Sloan School of management. He also Graduated in law from UNED (Spain). He worked at McKinsey & Company for 12 years (partner from 1997). He joined Endesa as Corporate Director of Strategy and member of its Executive committee and also became CFO. In 2008, Carlos joined BBVA as Head of Strategy and Corporate Development, and member of the bank’s Management Committee. In 2014 was appointed Head of Digital Banking, until 2015 when he became Chief Executive Officer of the bank. Carlos is currently Chairman of the Board of Directors in BBVA and Chairman of BBVA Foundation.

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This eight online seminar takes place in the framework of the Challenges for Bank Board Members series, which aims at building a community of professionals from the banking and finance industry interested in deepening their knowledge about bank boards’ functioning and learning how to challenge bank management effectively. Seminar speakers include an international faculty of regulators, supervisors, and academics together with bank and finance professionals. The Challenges for Bank Board Members series is part of the new FBF Bank Board Academy for Non-Executive Directors.

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Watch the recording of the event

   
The second event of the #FBFDiscuss! series will develop around the motion: “This House Believes that central banks should introduce central bank digital currencies.” The digitalisation wave in the financial sector has also reached the sphere of money, with cryptocurrencies such as Bitcoin and stable coins such as Diem increasingly dominating headlines. Several central banks have recently confirmed plans to evaluate the option of issuing their own digital currencies, including for retail use. In April, the Eurogroup announced its support for ECB plans to possibly issue digital euros. This debate will explore the pros and cons of such a move to central bank-issued digital currencies, including retail digital currencies. Will it help central banks and the financial system to keep up with digitalisation trends? Or will it risk undermining the banking system, and lead to rising cyber frauds and money laundering risks? Will it increase the efficiency of payments further? Or will it eliminate what little privacy we have left in the financial system?  

Proponent

Domenico Lombardi, Economist and Public Policy Expert Formerly the CEO of a foreign bank, he was as a think tank executive at CIGI, Ontario, and a senior scholar at the Brookings Institution in Washington. Previously, he served as an executive board member of the IMF and the World Bank in Washington. His research has been published in leading academic journals. Lombardi has been a regular speaker in high-level international fora, including the G20 and the governing bodies of multilateral financial organizations. He has testified a number of times, including before U.S. Senate Committees. He has led various high-profile evaluations: on the Financial Stability Board; on the World Bank (“5 Is Review”); and on IMF reform (“Fourth Pillar Report”). Lombardi holds a degree summa cum laude from Bocconi University and a Ph.D. in economics from Oxford University.  

Opponent

Steve Cecchetti, Rosen Family Chair in International Finance at the Brandeis International Business School. From 2008 to 2013, Professor Cecchetti served as economic adviser and head of the monetary and economic department at the Bank for International Settlements. During his time at the Bank for International Settlements, Cecchetti participated in the Basel Committee on Banking Supervision and the Financial Stability Board post-crisis global regulatory reform initiatives to establish new international standards for ensuring financial stability. In addition to his other appointments, Professor Cecchetti, from 1997–1999 served as Executive Vice President and Director of Research at the Federal Reserve Bank of New York; and from 1992-2001 he was editor of the Journal of Money, Credit, and Banking. Cecchetti has published widely in academic and policy journals, is the author of a leading textbook in money and banking, and blogs at www.moneyandbanking.com. Professor Cecchetti holds an undergraduate degree from the Massachusetts Institute of Technology, a doctorate from the University of California Berkeley, and an honorary doctorate in economics from the University of Basel.  

Moderator

Christy Ann Petit (EUI, FBF) is a Research Associate at the Florence School of Banking and Finance, part of the Robert Schuman Centre at the European University Institute (EUI). Christy recently defended her Ph.D. thesis at the EUI Law Department on ‘An integrated system for banking supervision in the Banking Union’, and previously graduated from the Ecole normale supérieure in law, economics, and management in France (2014), and, in European Law from the College of Europe (2015). During her postgraduate studies, she was an intern at the European Central Bank (Single Supervisory Mechanism) and at the Court of Justice of the European Union (General Court). Her research interests cover European prudential supervision and regulation, monetary policy and central banking in comparative perspectives, and the law of the Economic and Monetary Union. Her latest publications analyse ECB’s accountability and independence (Maastricht Journal of Comparative and European Law, 2019) and the SSM and ECB decision-making governance (Edward Elgar, 2019).  

References

• • S. Cecchetti and K. Schoenholtz, ‘Central Bank Digital Currency: The Battle for the Soul of the Financial System’, Money and Banking, June 2021, link
  • S. Cecchetti and K. Schoenholtz, ‘Libra’s dramatic call to regulatory action‘, Money and Banking, July 2019, link
  • S. Cecchetti and K. Schoenholtz, ‘Universal Central Bank Digital Currency?‘, Money and Banking, April 2018, link
  • R. Auer et al., ‘CBDCs beyond borders: results from a survey of central banks‘, BIS Papers No 116, June 2021, link

#FBFDiscuss! is a new Oxford-Union style debate format that will bring together two contestants from academia to debate a specific motion. After the opening statements, the event will see the direct participation of the public who will have the chance to pose their questions and vote for their favourite opinion. Join the discussion! Follow #FBFDiscuss on Twitter!

Women in Finance series

GENDER DIFFERENCES IN FINANCIAL LITERACY

Lecture by Annamaria Lusardi, The George Washington University, CEPR, NBER and Netspar 29 June 2021 – 13:00 CEST

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The Women in Finance series aims to highlight successful women across different areas of finance, public service, academia, and private sector. In our second event of the series, Professor Annamaria Lusardi will present the results of her research on gender differences in financial literacy: “Our data, collected over many years, show that women are less financially literate than men. It is unclear whether this gap reflects a lack of knowledge or, rather, a lack of confidence. We show that women tend to disproportionately respond “do not know” to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer. We estimate that about one-third of the financial literacy gender gap can be explained by women’s lower confidence levels. These estimates matter; both financial knowledge and confidence can be linked to stock market participation.”

For more information about Prof. Lusardi’s work, you can visit her webpage

Speaker

Annamaria Lusardi is University Professor of Economics and Accountancy at the George Washington University School of Business (GWSB). Moreover, she is the founder and academic director of GWSB’s Global Financial Literacy Excellence Center. Previously, she was the Joel Z. and Susan Hyatt Professor of Economics at Dartmouth College, where she taught for twenty years.

References:
– T. Bucher-Koenen, R. Alessie, A. Lusardi, M. van Rooij, Fearless Woman: Financial Literacy and Stock Market Participation, Working Paper, Global Financial Literacy Excellence Center, March 2021: link
– C. Barrett, P. Jenkins, Lack of confidence is impeding women’s financial literacy, study finds, Financial Times, March 2021: link
– L. Bottazzi, A.Lusardi, Stereotypes in Financial Literacy: Evidence from PISA , NBER Working Paper No. 28065, November 2020: link

Chair

Elena Carletti is Professor of Finance at Bocconi University. She is also founding director of the Florence School of Banking and Finance Florence School of Banking and Finance at the European University Institute, is a member of Board of Directors of Unicredit SpA and a member of the Advisory Scientific Committee of the European Systemic Risk Board (ESRB).

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Download the slides of the event

Speakers:
Charles Goodhart | London School of Economics
Manoj Pradhan | Talking Heads Macro

Chair and Moderator:
Thorsten Beck | Florence School of Banking and Finance

Abstract
The rise of China and global demography created a ‘sweet spot’ that has dictated the path of inflation, interest rates, and inequality over the last three decades. However, we are at a point of inflexion, accelerated by the COVID-19 pandemic. As that sweet spot turns sour, the multi-decade trends that demography brought about are set for a dramatic reversal.
Charles Goodhart & Manoj Pradhan‘s new book, The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival, (2020), discusses the implications of this at length. Many of their conclusions are controversial. Neither financial markets nor policymakers are prepared for a significant rise in inflation and wages, or a rise in nominal interest rates. Our other predictions are more benign – productivity will rise and labour will reclaim a greater share of national output, reducing the inequality that has led to so much social and political upheaval. Of one thing we are sure: the future will be nothing like the past.

Charles Goodhart was appointed to the Norman Sosnow Chair of Banking and Finance at the London School of Economics (LSE) in 1985, until his retirement in 2002 when he became Emeritus Professor of Banking and Finance. He was elected a Fellow of the British Academy in 1990, and awarded the CBE in 1997, for services to monetary economics. During 1986, he helped to found the Financial Markets Group at LSE. For the previous 17 years he served as a monetary economist at the Bank of England, becoming a Chief Adviser in 1980. Following his advice on overcoming the financial crisis in Hong Kong in 1983, he subsequently served on the HK Exchange Fund Advisory Committee until 1997. Later in 1997 he was appointed for three years, until May 2000, one of the four independent outside members of the newly-formed Bank of England Monetary Policy Committee. He became an economic consultant to Morgan Stanley in 2009, until he resigned, at the age of 80, in 2016. It was during this period that he began work on the subject matter of his recent book, The Great Demographic Reversal (Palgrave Macmillan), with his colleague there, Manoj Pradhan. He was written widely on matters relating to monetary policy, especially central banking, and macro-economics. Charles is the author of Goodhart’s Law “that any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.”

Manoj Pradhan is the founder of Talking Heads Macroeconomics, an independent research firm and co-author of the bestseller “The Great Demographic Reversal”. Manoj was most recently Managing Director at Morgan Stanley where he led the Global Economics team. He joined Morgan Stanley in 2005 after serving on the faculty of George Washington University and the State University of New York. Manoj works on thematic global macroeconomics, with a focus on emerging markets. He has a PhD in economics from George Washington University and a Masters in Finance from the London Business School.