As part of the Belgian Financial Research Forum, Prof. Darrell Duffie (Stanford University) will be giving a lecture on "Post Crisis Bank Regulations and the Liquidity of Financial Markets". The talk will start at 11:00 a.m. and will be followed by a lunch.
Abstract
The increased reluctance of big banks to use their balance sheets for intermediation of safer assets is caused by risk-insensitive forms of capital requirements, such as the leverage-ratio rule, and by increased funding costs that have nothing to do with regulatory capital requirements. Now that the creditors of big banks are less likely to be bailed out with government capital, they are requiring much higher credit spreads. Using models and evidence, I show that bank credit spreads set a lower bound on the extra return (above and beyond the fair market return) that banks must earn on their trading activities to compensate their shareholders for use of balance sheet space.
Darrell Duffie
Prof. Darrell Duffie is the Dean Witter Distinguished Professor of Finance at Stanford University’s Graduate School of Business. He is a Fellow and member of the Council of the Econometric Society, a Research Fellow of the NBER, a Fellow of the American Academy of Arts and Sciences, and a member of the board of directors of Moody’s Corporation since 2008. Duffie was the 2009 president of the American Finance Association. In 2014, he chaired the Market Participants Group, charged by the Financial Stability Board with recommending reforms to Libor, Euribor, and other interest rate benchmarks. Duffie’s recent books include How Big Banks Fail (Princeton University Press, 2010), Measuring Corporate Default Risk (Oxford University Press, 2011), and Dark Markets (Princeton University Press, 2012).
Practical Information
Registration
Registration is mandatory and should be done by filling out this online form.
Participation Fees: €50 (free for UCLouvain members)
Payment can either be done by:
- bank transfer. Upon filling the registration form, you should send an email to Anne-Marie Pessleux and she will let you know how to proceed.
- PayPal, in which case, you must fill in the PayPal form at the bottom of this page on top of the regular registration form.
- Once you submit the PayPal form, please make sure to complete the procedure clicking on the payment link at the bottom of the page.
Venue
Auditorium of the National Bank of Belgium
Rue Montagne aux Herbes Potagères 61
1000 Brussels