MOTIVATION – PRINCIPLES – OBJECTIVES
FRS Financial Risk and Stability gGmbH is an independent, recognised non-profit organisation ruled by German Law. It builts on the activities of the initiative Financial Risk and Stability Network as a successor organisation, and keeps its logo and name. The thematic focus is on regulation, financial stability and financial sector reforms in the EU. The organisation contributes to the provision of information and views exchange on these issues via its activities, its network platform and events. It thereby presents a basis and starting point for dialogue, research and cooperation on these issues.
How can society, scientists and the general public have a bigger say in the debates on financial sector reforms? This question stays of significant importance in rebalancing risks and benefits, reorient the financial sector toward activities that benefit society at large as well as to better align financial regulation with society’s goals. That is what FRS is heading at. Policy makers continue to face constraints including unfavorable structures of political economy, limited knowledge, lobbying powers and political opposition to advance financial reforms. Both, regulatory governance and policy making have to be strengthened to face regulatory and policy capture, national interests and regulatory arbitrage. Representation and governance is largely a political economy question – science and civil society have to get involved more.
FRS therefore stimulates debates and opinion making on regulation and financial sector reforms amongst scientists, politicians, regulators, industry experts and the interested public. The organisation will thereby intensify the discussion on an adequate regulation of the financial sector. It encourages research on these issues, disseminates results of its activities and takes part in the debates. FRS provides opportunities and offers a framework for all those who are interested in. The non-profit organisation is also open to and envisaging institutional cooperations as well as project collaborations as regards interdisciplinary research, views exchange and events.
Independence, transparency as well as a critical and constructive perspective are core values of the non-profit organisation (see below). The understanding is as an additional initiative acting in the notion of public interest to scientific institutions and civil society organisations. FRS stimulates research and opinion making, engages in education and advances the policy debate. The approach is dialogue- and research driven, also encouraging science in more vigorously addressing policy issues. Activities and events are essentially scientfic based and policy oriented.
For public debate and an active exchange of views the Financial Riks and Stability Network started organising events in 2012, in 2013 with its first financial stability conference. FRS developed in 2017 research activities and organised a first research workshop in 2018. It was followed in 2019 by an academic colloquium in cooperation with the Single Resolution Board. FRS shall expand events and acitivities in the forthcoming years, enabling and fostering cooperations, building partnerships, and providing a sensible impact to the discussions on regulatory reforms.
Interested persons and institutions as well as corporates can participate in the network if they find that objectives and mission of the non-profit organisation are valuable and relevant and shall be supported. The network is a starting point for exchange, research and cooperation. Members can bring in ideas and expertise for future activities. Members may support the organisation with an annual contribution or a donation. For more information see page ‘members‘.
Initiator of Financial Risk and Stability Network has been Martin Aehling. He launched the initiative in 2012, and since then manages the work and the network, operates the platform, organises the events and coordinates the activities. Martin Aehling became director of the non-profit successor organisation FRS Financial Risk and Stability gGmbH in January 2018. He develops the organisation and activities, expands the network and initiates cooperations. He is as well responsible for raising funding and support for the non-profit organisation.
Most of the work comes from Martin Aehling. He also raises funding since the launch of the initiative from different sources. The development of the non-profit organisation and its activities shall be funded by grants, supporting collaborations, sponsorings, membership contributions as well as donations. In the long term FRS seeks an institutional funding which does not affect its principles and independence. Current work and single projects can be supported via supporting contributions, donor- and sponsorships. We also are open to institutional cooperations as well as project related collaborations.
A sound financial sector is key for Europe, its citizans and economic welfare. We are still far from this. The last years have clearly shown the centrality of the financial system and its destabilising risks. The financial sector cannot self-stabilise, and therefore its paradigm is due for changes, both to mitigate future crises as well as to reorient financial institutions toward activities that benefit economy and society at large.
Crisis and moral hazard will not vanish in the future. Equally, financial stability is never a given condition. It is only achieved by rules, good regulation and oversight. We need to improve regulation, enhance governance and redirect responsibility to those who take the risks. And we have to ensure that underlying causes of risk build-up and vulnerabilities are addressed in adequate ways.
FRS encourages a new and for the society positive role of the financial sector. Some of its activities do not serve the economy and the society at large. To fulfill its vital functions and to create a better financial system more involvement from societal groups and academia is necessary. Likewise, we have to carefully look for signs of risks and call for different views to be heard.
Shaping policies which respect the needs of the economy, the interests of society and the public in general is therefore an essential and ongoing challenge. For this, we need focused research, open exchange and serious public discussions on financial reform initiatives on a broader basis. Good governance and adequate regulation can only come from having this ongoing debate. For this, we will contribute.
Independence, transparency as well as a critical and constructive perspective, supporting the notion of public interest, are core values of the non-profit organisation ‘FRS Financial Risk and Stability gGmbH’. The understanding is as a complementary scientific based and policy oriented organisation to research institutions and organisations. FRS stimulates research and opinion making, engages in education, advances the policy debate, and brings together the concerned stakeholders in open exchange and debate formats. The approach is dialogue- and research driven, also encouraging science in more vigorously addressing policy issues.
Following principles are standing for the general orientation and activities of FRS:
Independence is the guiding princple of FRS. The non-profit organisation is not tied or related to a political party, a school of thought, a company, an industry, an association or any other organisation. FRS is scientific based and acting in the notion of public interest from a civil society perspective.
FRS pursues a high level of transparency. Information on funding and sponsorships are made available. It is an open organisation and network for all those who find the objectives and ambitions relevant. Orientation, agenda and activities are public and transparent.
The information on financial-stability.org is public and at no charge for users. Contributions and comments to the content are appreciated as well as new posts and suggestions for new content.
Participation in the network is welcomed for all those who agree with the objectives and mission of the initiative and find that they are valuable and shall be supported. A certain level of responsiveness is expected. Depending on the background, members shall support the organisation with a contribution or a donation.
FRS has a critical and constructive perspective, supporting the notion of public interest. Aim is to contribute to information, research, exchange and public discussions, thereby providing an impact to the debates on financial reforms and stability.
FRS emphasises quality and clearness of activities and own organisation, adhering to high-value standards. Guidlines are professionalism and fairness – internally and externally.
FRS and its staff are commited to the stated principles of the non-profit organisation. Members, participants and cooperation partners shall not use the network for own interests which could affect or harm the credibility or the general orientation of the non-profit organisation.
From a policy perspective FRS supports and is aiming at:
Regaining and ensuring a diverse and resilient financial sector across the EU.
Effective regulation of the financial sector and limiting harmful activities.
Reducing the financialisation of society and the dimension of the financial sector.
Encouraging a new and positive role of the financial sector serving real needs.
Strengthening the vital functions of the financial sector for sustanaible growth.
Reorientation the allocation of capital in useful, productive investments.
Compliance to ethical, social, governance as well as climate-related objectives.
Reducing moral hazard and implicit subsidies thereby enhancing competition.
Restoring effective risk cultures and ethical behaviour in financial institutions.
Ending too-big-to-fail and too-political-to-fail by making bank resolution workable.
Limiting excessive pay and bonuses by establishing adequate compensation systems.
Limiting speculation with derivatives, commodities and high frequency trading.