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

Author/s Title Area Type Published
Otmar Issing Ökonomie in Zeiten fundamentalen Wandels
Policy Letter No. 104
Financial Markets Policy Paper 2024
Matteo Bagnara The Economic Value of Cross-Predictability: A Performance-Based Measure
SAFE Working Paper No. 424
Financial Markets SAFE Working Paper 2024
Satchit Sagade, Stefan Scharnowski, Erik Theissen, Christian Westheide A Tale of Two Cities: Inter-Market Latency, Market Integration, and Market Quality
SAFE Working Paper No. 430
Financial Markets SAFE Working Paper 2024
Mila Getmansky Sherman, Christian Kubitza, Loriana Pelizzon Loss Sharing in Central Clearinghouses: Winners and Losers
The Review of Asset Pricing Studies
Financial Markets, Systemic Risk Lab Published Paper 2024
K. Valerie Carl, Oliver Hinz, Patrick Weber Applications of Explainable Artificial Intelligence in Finance – A Systematic Review of Finance, Information Systems, and Computer Science Literature
Management Review Quarterly
Financial Markets Published Paper 2024
Fincap Team Non-Standard Errors
The Journal of Finance
Financial Markets Published Paper 2024
Angelina Hackmann Bridging the biodiversity financing gap
White Paper No. 103
Financial Markets Policy Paper 2024
Elena Carletti, Jan Pieter Krahnen Ukraine’s Reconstruction: Policy options for building an effective financial architecture
Policy Report No. 3
Financial Markets Policy Paper 2024
Florian Heider, Jan Pieter Krahnen, Katja Langenbucher, Vincent R. Lindner, Jonas Schlegel, Tobias Tröger The Geopolitical Case for CMU and Two Different Pathways Toward Capital Market Integration
White Paper No. 102
Financial Markets Policy Paper 2024
Aljoscha Janssen, Johannes Kasinger Obfuscation and Rational Inattention
The Journal of Industrial Economics
Financial Markets Published Paper 2024

Current Research Team

Researcher Position
Billio, Monica SAFE Fellow
Branger, Nicole SAFE Fellow
Curatola, Giuliano SAFE Fellow
Damm, Cara Maria Doctoral Student
Fitzpatrick, Aoife Doctoral Student
Gastaldello, Alessandro Doctoral Student
Gomber, Peter SAFE Fellow
Hinz, Oliver Professor
Knetsch, Andreas Postdoctoral Researcher
Kraft, Holger SAFE Fellow
Latino, Carmelo Postdoctoral Researcher
Lucke, Konrad Doctoral Student
Maddaloni, Angela SAFE Fellow
Pelizzon, Loriana Professor
Riedel, Max Postdoctoral Researcher
Schlag, Christian Professor
Schmeling, Maik SAFE Fellow
Shaliastovich, Ivan SAFE Fellow
Subrahmanyam, Marti SAFE Fellow
Theissen, Erik SAFE Fellow
Vozian, Katia Postdoctoral Researcher
Wang, Yue Doctoral Student