Past Event

Unfinished business: The unexplored causes of the financial crisis and the lessons yet to be learned

At this event Tamim Bayoumi will present his upcoming book on the financial crisis, showing how the Euro crisis and U.S. housing crash were, in fact, parasitically intertwined.

Date: September 28, 2017, 12:30 pm Topic: European Macroeconomics & Governance

video & audio recording


 

 

 

 

 

SUMMARY

The discussion went around the recent book, called “Unfinished Business”. Nine years ago a financial giant – Lehman Brothers filed for bankruptcy and it was followed by the loss of belief in the banking system. However, as it was underlined in the discussion, it was not only policymakers, who at that time did not expect a crisis, but academics and financial experts as well who underestimated the existing risks.
The main motivation for the book was a frustration of the author about what has been written on the financial crisis of 2008 before. It was biased either towards the North Atlantic economy discussion or Europe’s reaction to the financial crisis. Contrary, the author’s approach is instead to study the origins to understand the story behind and underlying forces to finish an unfinished business. The book’s focuses on the financial regulation aspects.
The central question of the discussion was how the collapse of one bank led to the collapse of the financial system worldwide and a short answer is that a whole series of regulatory missteps took place. The story goes back to 1980s. The European banks in mid 80s made a transition from lightly capitalized universal banks to better capitalized commercial periphery banks and later in 1992 the decision to have banking regulation at national level was made. This provoked two tendencies, which are a focus of regulators on national level and the fast expansion of banks. In the US, in comparison to the EU, there were highly separated either commercial or investment banks. In 2002 the structure of the US banking system changed from the strongly capitalized commercial banks to lightly capitalized US investment banks, which led to the transfer of mortgage from commercial to investment banks. By 2002 securitization was the most popular option, banks sold most mortgages to markets and after 2003 private mortgage securities surged. European banks had about 50 % of GDP in the North Atlantic banks mainly because that’s where investment banking was taking place in 2007. We allowed banking system to expand by creating demand through creating loans. Looking back, from the recent research it seems that bank oriented financial systems are more vulnerable compared to market oriented and this primarily explains why the US performed relatively better during the financial crisis.
The title “Unfinished business” speaks for itself, but it seems important to mention that there is a lot of finished business too with the progress reached in the European banking system. We have improvements in terms of the increased quality and quantity of capital, banking models used and the requirement to have financial stability authorities to mention a few. We are moving forward.

 

Event Notes by Yana Myachenkova

Unfinished Business: The Unexplored Causes of the Financial Crisis and the Lessons Yet to Be Learned

Schedule

Sep 28, 2017

12:30-13:00

Check-in and lunch

13:00-13:30

Presentation

Tamim Bayoumi, Deputy director, strategy, policy, and review department, IMF

13:30-13:45

Comments

Aerdt Houben, Director Financial Markets, De Nederlandse Bank and professor, University of Amsterdam

13:45-14:30

Audience Q&A

14:30

End

Speakers

Tamim Bayoumi

Deputy director, strategy, policy, and review department, IMF

Maria Demertzis

Deputy Director

Aerdt Houben

Director Financial Markets, De Nederlandse Bank and professor, University of Amsterdam

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

[email protected]

Read about event More on this topic
 

Past Event

Past Event

Investment firepower for the recovery: a conversation with Philippe Donnet, CEO of Assicurazioni Generali

At this event the CEO of Assicurazioni Generali, Philippe Donnet will be in conversation with Guntram Wolff, Director of Bruegel.

Speakers: Philippe Donnet and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: July 8, 2021
Read about event More on this topic
 

Past Event

Past Event

Strengthening the weak links: future of supply chains

What new supply chains trends will we see in the post-pandemic era?

Speakers: Ebru Özdemir, André Sapir and Guntram B. Wolff Topic: Global Economics & Governance Date: July 7, 2021
Read about event
 

Past Event

Past Event

Ensuring competitiveness of low-carbon investments

At this event, speakers will introduce the core idea of commercialisation contracts, and then discuss key design elements. This includes whether contracts should be issued at the EU or national level, how competition for contracts should be organised, and which industries should be eligible for support.

Speakers: Natalia Fabra, Peter Handley, Ben McWilliams and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance Date: July 1, 2021
Read about event More on this topic
 

Past Event

Past Event

EU debt vs national debts: friends or foes?

The EU will become into a major issuer of safe assets in the coming years. How will this interact with the debt issuance of European sovereign debts?

Speakers: Grégory Claeys, Yves Jacob, Gert-Jan Koopman, Pablo de Ramón-Laca and Imène Rahmouni-Rousseau Topic: European Macroeconomics & Governance Date: June 29, 2021
Read about event More on this topic
 

Past Event

Past Event

How to spend it? A closer look at the recovery plans

In this event, participants will take a closer look at the recovery plans submitted by EU countries.

Speakers: Zsolt Darvas, Alex Patelis and Maarten Verwey Topic: European Macroeconomics & Governance Date: June 23, 2021
Read about event More on this topic
 

Past Event

Past Event

Conference on the Future of Europe: Vehicle for reform versus forum for reflection?

At this policy dialogue organised by the research project EU3D, panellists will discuss different options and what they may entail while revisiting the debates on the future of Europe at national and EU-level that have been conducted thus far and their patterns, including preliminary findings on national parliamentary debates.

Speakers: Sergio Fabbrini, John Erik Fossum, Magdalena Góra, Vivien Schmidt, Manfred Weber and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: June 16, 2021
Read about event More on this topic
 

Past Event

Past Event

The Recovery and Resilience Fund: Accelerating the digitalisation of the EU?

How can new EU funds financed by EU borrowing supplement national digital and green funding and EU funds available from the standard seven-year EU budget to accelerate digitalisation?

Speakers: Sam Blackie, Zsolt Darvas, Maria Teresa Fabregas Fernandez, J. Scott Marcus and Ben Wreschner Topic: European Macroeconomics & Governance Date: June 8, 2021
Read about event More on this topic
 

Past Event

Past Event

Women, Covid-19 & The EU Recovery Plan

How can we ensure that the recovery plan doesn’t leave women behind when 84% of working women in the EU aged 15-64 are employed by services that were predominantly impacted by Covid-19 restrictions?

Speakers: Mary Collins, Maria Demertzis, Alexandra Geese, Jacob Funk Kirkegaard, Dan Mobley, Naomi O'Leary and Emma Rainey Topic: European Macroeconomics & Governance Date: June 2, 2021
Read about event More on this topic
 

Past Event

Past Event

Paris Reinforce: From Numbers to Insights: How to think about economic-climate modelling

Join us for the presentation of ‘From Numbers to Insights: How to think about economic-climate modelling’.

Speakers: Haris Doukas, Ajay Gambhir, Glen Peters, Georg Zachmann and Ewelina Daniel Topic: Energy & Climate Date: May 26, 2021
Read about event More on this topic
 

Past Event

Past Event

The work of the future: How are new jobs created and what are the implications for labour markets?

Join us for a presentation of 'New Frontiers: The Origins and Content of New Work, 1940 — 2018' by David Autor (MIT and NBER) and the findings on the source of 'new work' followed by a discussion with an invited panel of academics and policy makers.

Speakers: David Autor, Maarten Goos, Barbara Kauffmann and Georgios Petropoulos Topic: Innovation & Competition Policy Date: May 25, 2021
Read about event
 

Past Event

Past Event

The Future of Work – a conversation with Commissioner Schmit

EU Commissioner for Jobs and Social Rights Nicolas Schmit joins Bruegel for a conversation around the future of work.

Speakers: Mario Mariniello and Nicolas Schmit Topic: European Macroeconomics & Governance, Innovation & Competition Policy Date: May 25, 2021
Read about event More on this topic
 

Past Event

Past Event

After COVID-19: a most wanted recovery

This event, jointly organised with ISPI, as the National Coordinator and Chair of the T20 Italy, is part of the T20 Spring Roundtables and it will focus on strategies for a swift and sustainable economic recovery for Europe.

Speakers: Franco Bruni, Maria Demertzis, Elena Flores, Paul De Grauwe, Christian Odendahl, Miguel Otero-Iglesias and André Sapir Topic: European Macroeconomics & Governance Date: May 19, 2021
Load more posts