Financial Markets
The Financial Markets department examines the functioning, resilience, and change of financial markets, which today are essentially determined by exogenous and endogenous shocks, risk spillovers (e.g., due to the Corona pandemic, the Ukraine war, and the 2023 banking stress), monetary policy, technology, and regulation. This raises research questions about the consequences for asset pricing, competition, secondary market liquidity, market stability, systemic and country risk, and consumer protection. Specific regulatory measures such as the EU's Markets in Financial Instruments Directive (MiFID II), the European Market Infrastructure Regulation (EMIR), the Sustainable Finance Disclosure Regulation (SFDR) or secular trends such as demographic change or climate change affect the functioning of markets or the investment decisions of investors and are therefore also the subject of research in the department. The same applies to new digital developments such as FinTechs, BigTechs and recent developments in artificial intelligence, crypto assets or blockchain technology, which could disrupt the functioning of financial markets and contribute to systemic and sovereign risks, as well as the new EU regulation on crypto assets (MiCA), which aims to improve investor protection.
Explore the findings from a study by SAFE PhD candidate Carmelo Latino that sheds light on sustainability-related corporate name changes. The study suggests a possible link between these changes and greenwashing practices. Loriana Pelizzon comments: "The results of the study suggest that greenwashing does not have a lasting positive effect on stock prices."
As climate change affects financial markets vigorously, Loriana Pelizzon led a web seminar in March where guests from the ECB and the ESRB presented the insightful Climate Report, which outlines key macroprudential policies to address climate-related risks in the financial sector.
There are several upcoming conferences on topics covered by the Financial Markets Department: The 11th SAFE Asset Pricing Workshop on 24 September and the 8th SAFE Market Microstructure Conference on 20 September are accepting papers until the end of May. In addition, the CEBRA Annual Meeting 2024 will be organized in cooperation with SAFE and the House of Finance, Goethe University Frankfurt. Scheduled for August 28-30, this event provides a platform to discuss topical issues relevant to central banks, financial regulators, international financial institutions and fiscal authorities, with the participation of more than 30 central banks expected.
The department is (co-)organizing the following conference series:
Publications
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