The use of financial market research in such a way that it can serve as political advice that is actually taken into account by decision-makers, without losing the claim to scientific excellence, are the main pillars of the Leibniz Institute for Financial Research SAFE – and, according to leading economists and politicians, are largely to the credit of Jan Pieter Krahnen. On 25 May 2023, the SAFE Founding Director was honored for his groundbreaking work at a ceremony attended by nearly 200 guests on the Westend Campus of Goethe University Frankfurt.
Conceived as a double ceremony, the event not only saw Jan Krahnen depart as SAFE’s first Scientific Director, but also officially confirmed Florian Heider in office as Krahnen’s successor. A number of distinguished guests looked back on SAFE’s history in keynote speeches on site and via video messages, highlighting Krahnen’s accomplishments in particular. In her speech, sent via video message, current Federal Minister of Education and Research Bettina Stark-Watzinger recalled “the time when this institute was just an idea on a piece of paper. It’s always the people who make the difference.” People like Jan Pieter Krahnen, she said. Under his leadership, she added, SAFE has become a pioneer in interdisciplinarity. “Challenging existing beliefs is the only way to make progress. We need more research and science based on curiosity – and that’s exactly why we need SAFE,” Stark-Watzinger argued.
"Constant innovation mode"
The Hessian Minister for Science and the Arts, Angela Dorn, emphasized in a greeting that was also shown on screen, that the “exemplary success story” of SAFE would not have been possible without Jan Pieter Krahnen. “You have the ability to inspire people and engage them,“ said Dorn, who also serves as chair of SAFE’s board of trustees, “so the institute remains in a constant innovation mode.” Goethe University’s Vice President Christiane Thompson expressed similar sentiments, saying, “You led the former LOEWE Center with great passion, ensuring the success of today’s SAFE Institute.”
Solid and credible research must always form the core of policy advice. She personally shares this conviction with Jan Krahnen, explained Ulrike Malmendier, Professor at the University of California at Berkeley and one of the “economic experts” on the German Council of Economic Experts. Although there are numerous research institutes and think tanks in Germany, the best economists are rarely active in the field of science-based policy advice and therefore hardly ever interact with decision-makers. “Jan is one of the few who has succeeded in bridging the gap between policy advice and cutting-edge research. I would like to emphasize that this bridge would not have happened without his academic excellence,” said Malmendier, who is also a member of SAFE’s Research Advisory Board.
Sven Giegold, State Secretary at the German Federal Ministry for Economic Affairs and Climate Protection, cited SAFE’s achievement under Jan Krahnen in connection with the Wirecard case, and, more recently, the collapse of the US Silicon Valley Bank (SVB) as an example of the complex combination of excellent, independent research on financial markets and policy advice based on it. On the SVB, a SAFE research team had put forward a proposal for a comprehensive deposit insurance scheme to minimize the risk of bank runs. “This is exactly the kind of expertise we need,“ Giegold explained. Only a few experts in Germany have a comparably extensive knowledge of banking regulation and financial markets like Jan Krahnen. It is to his credit that SAFE not only conducts relevant research, but also promotes an intensive exchange as a forum for public debate. The institute could therefore be seen as a role model for European integration.
Under his successor, Florian Heider, SAFE will strengthen its profile, Giegold continued. In this context, the State Secretary drew attention to another regulatory policy construction site: Which institution, if not SAFE, could present proposals for the implementation of a Capital Markets Union, on which Europe depends. “Help us realize this opportunity,” Giegold said.
At the end of the event, Jan Pieter Krahnen himself emphasized that a team approach was the key to success: “This idea is firmly anchored in the SAFE DNA.” Not only does he appreciate his successor as an exceptional researcher, Florian Heider is also an “absolute team player,” Krahnen added, who will maneuver the institute in the right direction for the coming years. Krahnen concluded his speech with a quote from the first stanza of Hermann Hesse’s poem “Steps”: “For each beginning bears a special magic.”
