SAFE Policy Lecture: Ewald Nowotny
Title: Perspectives on the Structure of Europe’s Banking Industry
Speaker: Ewald Nowotny, Governor, Austrian National Bank & Board Member, European Central Bank
The Great Financial Crises found Europe’s banking industry wanting. This also held true for its supervisory infrastructure. The upshot was that financial markets fragmented. Finally, in the summer of 2012, the nadir was reached. The implementation of monetary policy was structurally impaired. Even the singleness of its approach was threatened. To be effective, monetary policy has to rely on a resilient banking industry. This holds true, in particular, in the European case, where most of the external funding is bank-intermediated. With the implementation of the Single Supervisory Mechanism as well as the Single Resolution Mechanism, Europe’s financial markets are getting back on track. What are the pre-conditions for a banking sector capable of serving its purpose, i.e. managing risks and funding the economy? What industry structure is most appropriate? Will it be European?
Ewald Nowotny is the Governor of the Austrian National Bank as well a member of the Board of the European Central Bank. Prior to that, between 2006 and 2007, he was CEO of BAWAG PSK AG, Vienna, and Vice President of the European Investment Bank, Luxembourg (between 1999 and 2003). For some 20 years he served in the Austrian Parliament, between 1985 and 1999 as chair of its financial affairs committee. Professor Nowotny has an outstanding academic career. He taught at Linz University, Harvard, and held, for more than 25 years, a chair in economics at Vienna University of Economics. And he has published extensively, in particular in his main fields of interest, public finance and monetary and banking policy.