The research agenda of the LOEWE Center SAFE is aimed at analyzing the requirements for an optimal framework – a “sustainable architecture” – for financial markets and their agents. To this end, the scholars contributing to SAFE deal with all features of the ever more complex financial world: institutions, instruments as well as motivations of all actors.
A main focus of SAFE’s research program in the period of 2016–2018 is to examine the impact of new regulatory measures on the stability of financial systems. Apart from the question of whether measures were successful in achieving the targeted results, also non-intended consequences of increased regulation are of importance. Examples include the impact on competition in the financial sector and on innovation and risk taking, the rise of shadow banks, the effectiveness of unconventional monetary policy measures as well as the modification of business models of banks and stock exchanges under the additional influence of digitization and technological change.
A further emphasis lies on the relevance of the financial system for economy and society. In this context, welfare theoretical questions, beyond acute crises, are of importance: how can we foster the innovation and growth potential of an economy, how can we treat the challenges of demographic change as soon as possible, and how can we deal with the pressing questions of redistributing wealth and opportunities within one country as well as between different economies.