Bank Funding
Markets, instruments and implications for corporate lending and the real economy

Joint conference by: European Central Bank, Federal Reserve Bank of New York and Review of Finance

Location: Conference Room CIV, 2nd floor, Eurotower

10:30-11:00 Registration and coffee
  SESSION I
11:05-11:15 Opening of the Conference
11:15-12:00 Tobias Adrian and Nina Boyarchenko (Federal Reserve Bank of New York),
'Intermediary Leverage Cycles and Financial Stability’
Discussant:10 minutes
Open comments: 5 minutes
12:00-13:00 Lunch
  SESSION II
Chair: Diego Rodriguez-Palenzuela (ECB)
13:00-13:45 Keynote Arnoud Boot (University of Amsterdam),
‘Bank Funding, Marketability, Complexity, and Monetary Policy’ (title TBC)
Open comments: 10 minutes
13:50-14:35 Massilimiano Affinito (Bank of Italy),
‘Central bank Refinancing, Interbank Markets and the Hypothesis of Liquidity Hoarding: Evidence from a Euro-area Banking System’
Discussant:15 minutes
Open comments: 5 minutes
14:40-15:25 Warren Hrung and Asani Sarkar (Federal Reserve Bank of New York),
‘The US Dollar Funding Premium of Global Banks’
Discussant:10 minutes
Open comments: 5 minutes
15:25-16:00 Coffee
  SESSION III
Chair: Benjamin Sahel (ECB)
16:00-16:45 Charles-Henri Weymuller (Harvard University),
‘Haircuts and Relationships’
Discussant:10 minutes
Open comments: 5 minutes
16:50-17:35 Charles Calomiris, Florian Heider and Marie Hoerova (Columbia University and European Central Bank),
‘A Theory of Bank Liquidity Requirements’.
Discussant:10 minutes
Open comments: 5 minutes
19:30-19:45 Dinner at ‘Intercontinental’
19:30-19:45 KEYNOTE: ‘Topic TBD’
Cœuré, Benoît (European Central Bank, Executive Board member)

Location: Conference Room CIV, 2nd floor, Eurotower

8:00-9:00 Coffee
  SESSION IV
Chair: TBC
8:30-9:00 John Griffin, Richard Lowery and Alessio Saretto (University of Texas),
‘Complex Securities and Reputation: Do Reputable Underwriters Produce Better Securities?’
9:00-9:30 Gonzalo Camba-Mendez, Santiago Carbo-Valverde and Diego Rodriguez-Palenzuela (European Central Bank and Bangor University),
‘Access to Funding by European Banks and the Financial Crisis’
9:30-10:00 Kostas Tsatsaronis and Jing Yang (Bank for International Settlements),
‘Bank Cost of Equity, Leverage and the Business Cycle’
10:00-10:50 Joint discussion and open comments
10:50-11:15 Coffee break
  POLICY SESSION
Chair: Ulrich Bindseil
11:15-12:45 Andrew Sheets (Morgan Stanley)
Member/representative (Federal Reserve Bank of New York, TBC)
Philippe Bodereau (Pimco)
Martin Hellwig (Professor of Economics, University of Bonn)

40 minutes presentation (10 by participants), 20 minutes comments, 30 minutes open floor
12:45-12:50 Closure of the conference Steven Ongena and David Marques-Ibanez
12:50-14:00 Lunch

Venue

To be held at the European Central Bank, Kaiserstrasse 29, in Frankfurt, Germany
8 - 9 October 2012

There are a limited number of available places

Background

The strong and increasing interconnection between banks, financial markets, and the shadow banking system has been one of the major structural developments in the financial system in recent years. As a result, distress of financial institutions tends to be amplified in financial markets and provide a mechanism for the spreading of risk across institutions. The spreading of distress can lead to the impairment of the financial system’s ability to intermediate credit, with potentially adverse consequences to real economic activity. The increased role of financial markets in bank funding has also had a significant impact on credit supply, overall lending standards and the real economy. The evolving models of bank funding are likely to play an important role in determining the resilience of the banking sector and have implications for international macroeconomic developments.

This conference aims to bring together researchers from financial stability, financial intermediation, financial econometrics, corporate finance, asset pricing and macro-finance to gain insight into the relation between bank funding, credit and real activity. The conference includes already confirmed speakers such as Benoît Cœuré (Member of the Executive Board at the European Central Bank), Philippe Bodereau (Head of pan-European Credit Research at Pimco), Ulrich Bindseil (Director General of the Markets Operations Department at the European Central Bank), Arnoud Boot (University of Amsterdam), Laurent Fransolet (Head of European Fixed Income Strategy at Barclays Capital) and Martin Hellwig (Bonn University and Chair of the Advisory Scientific Committee of the European Systemic Risk Board).

Topics

The conference aims to include presentations by leading academics, financial market practitioners and policy makers. The conference will target influential, rigorous, innovative, policy-relevant empirical papers as well as relevant theoretical contributions.

Topics will include, but are not limited to, the following:

  • financial market incentives and bank funding,
  • International implications of the evolving models of funding,
  • the impact of different types of bank funding on the supply of corporate lending (including SME lending) and investment,
  • corporate bond issuance as a complement/substitute to bank lending over the cycle,
  • bank deleveraging and its impact on credit,
  • bank restructuring, bank funding, and the supply of credit.
  • the nexus between government debt and bank funding,
  • the costs of raising of bank equity during crisis and non-crisis periods,
  • corporate loan securitizations (CLOs, and ABS of SMEs) and investment,
  • central bank policies (including collateral eligibility), bank funding and bank investment,
  • bank funding and the transmission mechanism of monetary policy.

Details about the sponsors: www.ecb.int, www.newyorkfed.org and www.revfin.org.

Local Organizing Committee

  • Diego Rodriguez-Palenzuela (European Central Bank)
  • Cornelia Holthausen (European Central Bank and CEPR)
  • David Marques-Ibanez (European Central Bank, conference coordination)
  • Benjamin Sahel (European Central Bank)

Programme Committee

  • Tobias Adrian (Federal Reserve Bank of New York)
  • Franklin Allen (University of Pennsylvania)
  • Nicola Cetorelli (Federal Reserve Bank of New York)
  • Cornelia Holthausen (European Central Bank and CEPR)
  • Peter Karadi (European Central Bank)
  • Steven Ongena (Tilburg University and CEPR)
  • David Marques-Ibanez (European Central Bank)
  • Diego Rodriguez-Palenzuela (European Central Bank)
  • Benjamin Sahel (European Central Bank)
  • Tanju Yorulmazer (Federal Reserve Bank of New York)