The financial crisis in entering its third year. While the measures adopted by the governments and central banks were initially aimed at mitigating the direct effects of the crisis on the real economy and the financial sector, recent measures have been directed towards preventing future crises. To this end, it is necessary to establish a fundamental understanding of the causes and development of the crisis. Against this background, ZEW organised a conference on “Systemic Risk and Incentives” in September 2010. The keynote speech was delivered by Axel Wieandt, the former CEO of Hypo-Real Estate.
The conference focused on three main topics which proved to be of critical importance for the outbreak and the development of the crisis. Under the banner of one of these topics, “Household Finance and Mortgage Markets”, John Muellbauer from Oxford University shed light on the importance of credit markets and mortgage financing for private consumption in the United States. Ernst-Ludwig von Thadden from the University of Mannheim focused on the topic “Liquidity”, providing insights into the phenomenon of “repo runs”, which led to major liquidity issues over the course of the crisis. During his presentation, Jean-Charles Rochet from the University of Toulouse identified possible options to reduce the risk appetite of banks that are “too big to fail”. As part of the third topic, “Governance”, Christa Bouwman from CASE Western University pointed out that there is already an approximation of corporate governance systems in businesses as a result of personal ties between different companies.
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