FINANCIAL STABILITY CONFERENCE 2021

Failing forward or taking momentum: Covid-19 systemic effects, climate change emergencies and defects of the current crisis management framework
– Investigating the consequences and advancing on appropriate policies

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The organisers take a foremost policy-oriented stance to discuss some of the most crucial issues lying ahead. Central questions will be:

• how to address and manage detrimental systemic repercussions of the Covid-19 crisis impacts,
• how to address climate change risks and ensure the urgent transition to a low-carbon economy,
• how to redefine roles and the mandate of the ECB and central banks in the era of climate change,
• how to overhaul and refine the current EU’s crisis management and deposit insurance framework.

FSC  |  18 and 19 Nov. 2021  |  online

18  Nov.  |  10:00  –  17:00  CET  |  conference
19  Nov.  |  10:00  –  12:00  CET  |  conference
19  Nov.  |  13:00  –  16:45  CET  |  workshop
public events | no in advance registration required

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10:00   Opening Day 1
Martin Aehling, Director, Financial Risk and Stability Network

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10:10   Keynote Speech
Title

Fernando Restoy, Chairman, Financial Stability Institute

followed by a Q&A session with:
Arnoud Boot, Professor of Corporate Finance and Financial Markets, University of Amsterdam

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10:40   Panel  I  –  Impulse  I
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10:50   Panel  I  –  Impulse  II
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11:00   Panel  I  –  Discussion
Impact of the Covid-19-crisis on banks, financial stability and the Euro area: How to address negative effects and manage detrimental systemic repercussions?

• Assessing the Commission’s coronavirus recovery strategy: Have banking package and tackling NPL-strategy been adequate responses?
• CRR “quick fix”, moratoria, credit guarantees and state aid rules in response to the coronavirus crisis: Which strategy for phasing out?
• Leaping sovereign debt and increasing bank exposures: How to address the tightening state-bank nexus and its policy implications?
• Crisis containment: How to conceive and frame a working blueprint for transition strategies once financial policy measures are phased out?
• Lessons to learn for future crisis externalities: Interest of society, continuance of bank activity and responsibility for crisis provisions

Luis Garicano, MEP, Leader of Ciudadanos in Europe, Vice President for Economic Affairs of Renew Europe
Francesco Mazzaferro, Head of the Secretariat, European Systemic Risk Board
Christian Stiefmüller, Senior Research and Advocacy Advisor, Finance Watch
Rolf Strauch, Chief Economist and Management Board Member, European Stability Mechanism
Moderation:  Arnoud Boot, Professor of Corporate Finance and Financial Markets, University of Amsterdam

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12:30    Break

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13:00   Keynote Address
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13:15   Panel  II  –  Impulse
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13:25   Panel  II  –  Discussion
Facing the existential threat of climate change: How to address the entrenched risks and ensure an encompassing transition to a low-carbon economy

• Understanding the dimensions of climate-related risks: Which methods and measures could be applied to realistically analyse and effectively manage them?
• Penalizing the financing of carbon-intensive industries: How to define a brown taxonomy, implement it and redirect the allocation of capital and lending?
• The EU taxonomy: How to re-sharpen the categorisation of industries and action the taxonomy as a global classification standard for sustainable activities?
• The limitation of the taxonomy to a few instruments: How to encompass the whole range of finance vehicles and ensure a comprehensive sustainability stance?
• The growth paradigm is due to change: What are the consequences of the transitions for bank business models and which requirements should be set?
• Limited effectiveness of ‚soft rules‘ in form of disclosure, transparency and ESG-governance: Which mandatory rules could be added to make the necessary headway?
• The promise of green finance: Do we need a legal coercion dimension of regulatory and policy measures to leave the niche and effect credible real change?
• Decision making in financial intermediaries: How can internal structures be adapted to process climate-related risks and integrate them in customer relations?
• How shall banks and financial institutions develop, implement and practice environmental risk assessment methodologies?
• Transforming awareness into concrete banking businesses: How to link each division’s activities to specified sustainable and climate protection target marks?

Bart Joosen, Professor of Financial Supervision Law, VU University Amsterdam
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Moderation:  N.N.

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14:30    Break

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15:00   Panel  III  –  Impulses  |  Keynote
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15:30   Panel  III  –  Discussion
The new role of central banks in the era of climate change: How to redefine mandates, address trade-offs, concretise and operationalise green policies?

• Implementing the new ECB strategy: How shall a green mandate to mitigate climate change be integrated and operationalised in the amended monetary policy framework?
• The false principle of ‚market neutrality‘ in liquidity investments, collateral provisions and asset purchase programmes:
  • How to alter from brown to green central banks?
  • Introducing a brown penalizing factor in central banks’ policies?

• EU’s central banks‘ stance for sustainable investment principles: To what extent non-monetary portfolio adjustments and qualitative controls can contribute to climate goals?
• Integrating climate change risks into central banks‘ financial stability monitoring: How to encompass and address the uncertainty of the inherent complex dynamics?
• The prevalence of short-term factors and considerations in markets and industry decisions: Which steering effects could central banks set for a sustainable path?
• The dysfunctionality of markets, economies and policies in achieving agreed climate goals: What can cental banks contribute as regards critical policy coordination?
• Lastly: Societal priorities and concerns as new central banks‘ parameters: How could the admissibility of such objectives and the modalities of their pursuit be framed?

Ignazio Angeloni, Research Fellow, Harvard Kennedy School, and Senior Policy Fellow, SAFE, Goethe-University Frankfurt
Justine Leigh-Bell, Deputy CEO and Director of Market Development, Climate Bonds Initiative
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Moderation:  Nicolas Véron, Senior Fellow, Peterson Institute for International Economics and Bruegel

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17:00    Conference end first day

 

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10:00   Opening Day 2
Martin Aehling, Director, Financial Risk and Stability Network

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10:05   Keynote Speech
Title

Kerstin af Jochnick, Member of the Supervisory Board, European Central Bank
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10:30   Panel  IV  –  Impulse
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10:40   Panel  IV  –  Discussion
The Commission’s review of the crisis management and deposit insurance framework: Identifying the bypasses and clearing up the impediments to orderly resolution

• The European Commission’s review of the CMDI framework: Where do we stand at present and which amendments shall come on the table in detail?
• The diversity of insolvency procedures and hierarchies across member states and tools akin to the BRRD/SRMR: How to make headway on a consistent approach?
• Unhelpful incentives for national authorities in dealing with failing or likely to fail banks: Which revsions are necessary to minimise the use of public funds?
• The resolution of medium-sized banks: What are the impediments, how to modify the toolset and could the FDIC be taken as a blueprint?
• The elephant in the room: How to make progress on a European deposit insurance scheme and handle the many practical and political obstacles?

Marie Donnay, Head of Unit Resolution and Deposit Insurance, European Commission
Samy Harraz, Head of Strategy, International Relations and Communications, Single Resolution Board
Sébastien Raspiller, Director, French Treasury, Ministry of the Economy, Finance and the Recovery Plan of France
Sven Schelo, Partner Restructuring and Insolvency, Linklaters
Moderation:  Luís Silva Morais, Professor of Law, University of Lisbon, and Founding Partner, LSM Advogados

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11:55   Closing
The organisers

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12:00   Conference end second day

 

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13:00  –  16:45   Four Sessions:  see workshop programme

Programme schedule:

13:00   Welcome
Martin Aehling, Director, Financial Risk and Stability Network

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13:10   Session I
Presentation
Working title (proposal):  Covid-19: what determines financial policy responses?

Elias Bengtsson, Department of Economics, University of Gothenburg
13:25   Discussant: Bart Joosen, Professor of Financial Supervision Law, VU University Amsterdam
13:35   Q&A audience
13:55   END of the session

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14:00   Session II
Presentation
Working title (proposal):  ECB significant bank risk profile and Covid-19 crisis containment phase: what approach in the transitioning phase?

Dalvinder Singh, School of Law, University of Warwick
14:15   Discussant: N.N.
14:25   Q&A audience
14:45   END of the session

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14:45   Break

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15:00   Session III
Presentation
Stress testing the climate: designing scenarios for sustainable development goals

Stavros Pantos, PhD Candidate, University of Reading
15:15   Discussant: N.N.
15:25   Q&A audience
15:45   END of the session

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15:50   Session IV
Presentation
Too green, not green enough? A plea for greater coordination of central banks’ greening in the EU

Agnieszka Smoleńska, Associate Researcher, European Banking Institute
16:05   Discussant: Maria Nieto, Bank of Spain
16:15   Q&A audience
16:35   END of the session

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16:35   Closing
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16:45   Workshop END