Specialist
Professor Emeritus at City University of London
Agenda
- Bank runs and contagion, discussing learnings from historical events in today’s crisis
- Illiquidity, capital and insolvency crisis differences, analysing how market confidence plays a role in their self-perpetuating nature
- Banking resilience post-2008 crisis and expected signalling from regulatory and banking authorities
- Potential drivers of further banking runs and remaining risk retained in current financial system
Questions
1.
What’s the historical context of bank runs?
2.
How else would you define best practice?
3.
Do you think the Federal Reserve and FDIC [Federal Deposit Insurance Corp] potentially acted in the wrong way in relation to SVB [Silicon Valley Bank] when it had a shortfall of liquidity?
4.
How much do you think imperfect information plays a role in creating bank runs? For SVB, you had a lot of venture capitalists saying, “Withdraw your money.”
5.
Why do you think the rules laid out such a long time ago, by people such as Walter Bagehot, aren’t followed as avidly as claimed to be?
6.
How much do you think political and market pressure influences central banking and regulatory decisions?
7.
You said most banks are almost always profitable or solvent in the long run. How do you distinguish between a liquidity and a capital or solvency crisis?
8.
Would you say 70% of crises are liquidity vs 30% capital? Which one is more common?
9.
Are there any other learnings that we should take from historical failures and financial crises that aren’t currently applied?
10.
Do you think deposits have become inherently more fragile? What do you think of digital banking where you can move money on your mobile app?
11.
Are there any other learnings that we should be taking from historical failures or earlier crises that we haven’t touched on?
12.
Do you think we’ve had good financial stability post the global financial crisis and throughout coronavirus?
13.
Do you think central banks are going to be able to behave in the right way going forwards? Where do you see hiking and quantitative easing or tightening going?
14.
Do you see further rate hikes from central banks, or do you think they’re going to be able to continue quantitative tightening? Is that going to lead to further failures?
15.
Do you agree with the market pricing that we’ll see Fed, BoE [Bank of England] or ECB [European Central Bank] cuts before the end of 2023?
16.
How idiosyncratic do you think the recent banking turmoil was between SVB and Credit Suisse?
17.
Do you think that US regional banks are still inherently more risky than European banks, given lesser diversification? How do you expect that dynamic to play out?
18.
Do you still see a place for regional banks going forwards?
19.
Are there any other drivers or warning signals you see to further financial instability in the current operating environment?
20.
What dynamics do you find most interesting today?
21.
You discussed how you expect regulatory bodies and central banks to act, or how you think they should be acting. What do you expect to see from the BoE, European Banking Authority, ECB and Fed? What actions do you see them taking vs what would be most beneficial?
22.
What do you see as the key head- and tailwinds for financial stability going forwards?
23.
Would you be surprised if further bank failures occurred in 2023? If so, where might they come from?
24.
Is there anything about global banking that you’ll be watching going forwards, or is there anything that we haven’t covered that you’d like to highlight or draw attention to?
