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Opening remarks by Director Ana Paula Serra at the European System of Central Banks' Day-Ahead Conference

On behalf of the Board of Directors of the Banco de Portugal and myself I would like to welcome to you.

We are glad that this event is being held in Lisbon, at our central bank’s premises, for the second time.

It is a pleasure for me to have the opportunity to address you on this occasion and let me thank you all for being here.

I will be brief since it is going to be a long day and we need to spare our precious time for the discussions of the topics that will be addressed today.

The main objective of the Day-Ahead conferences is to create an opportunity for interaction among research economists within the ESCB, other central banks and academia.

The Day-Ahead conferences are hosted before one of the two best European annual conferences: the EEA (European Economic Association) or the EFA (European Finance Association). These two large conferences bring together economists working on the forefront of economic and financial research and therefore holding the Day-Ahead conference is a great opportunity and a very efficient way to promote a close interaction between these researchers and central banks.

Probably most of you know but let me remind you that these conferences started in Stockholm at the Riksbank in 2011. Since then, thanks to Kasper Roszbach, from Norges Bank, and Wilko Bolt, from De Nederlandsche Bank, year after year, the Day-Ahead venture has been a successful event of the Eurosystem, gathering high-quality and policy-relevant research oriented towards banking, finance, and monetary economics.

We have had Day Ahead Conferences at Bank of Spain, Bank of England, Banque de France, Austrian National Bank, Norges Bank and Banco de Portugal.

The 2020 conference will be held in De Nederlandsche Bank in Amsterdam.

Banco de Portugal already had the honor of hosting the Day-Ahead conference first in 2017, when the EEA was held in Lisbon. Eight top quality papers were presented then, focusing on four topics:

  • Financial Distress, Financial Regulation, and Heterogeneity
  • Inequality, Financial Crises and Real Effects
  • Financial Imbalances and Monetary Policy
  • Bank Capital and Bank Credit

This year, Nova SBE hosts the 46th Annual Meeting of the European Finance Association on its new campus in Carcavelos. Banco de Portugal is supporting the EFA and is again honored to host the Day-Ahead conference.

This conference has greatly benefited from the immense and careful work of the Organizing Committee. Many thanks to Kasper Roszbach (Norges Bank), Wilko Bolt (De Nederlandsche Bank), and to the local organizers Diana Bonfim (Banco de Portugal) and Ettore Panetti (Banco de Portugal).

We were privileged to rely on a great scientific committee, from academia, from ESCB and other central banks. They helped us define the great program that we have ahead of us today. Many thanks to all, to those that could not attend and to those that are here with us today.

The conference today will for sure greatly benefit also from the work of the seven discussants that agreed to offer their views and suggestions on the papers presented. The session chairs will also ensure that there is a lively and constructive debate. Thank you.

Last but certainly not the least, we would like to thank Victoria Ivashina from Harvard Business School. 

She is the Lovett-Learned Chaired Professor of Finance at Harvard Business School, where she is also the faculty chair of the Global Initiative for the Middle East and North Africa (MENA). She is a research associate at NBER, a research fellow at CEPR, and a visiting scholar at Boston Fed and the ECB. 

Her research has been published in the top journals in finance and economics and is regularly cited in media outlets including The Economist, The Financial Times, and The Wall Street Journal 

Professor Ivashina will give a keynote speech about pension investments around the world in the last decade. The rise of the so-called shadow banking sector in the financial system makes this discussion very timely and relevant for researchers and policymakers at central banks.

Today, seven papers will be presented. These were selected out of a recorded number of 199 submissions. 

The submissions came from 70 different institutions, 25 of which are central banks.

The call for papers was anchored on some of the priorities defined in Banco de Portugal’s research agenda:

  • Financial intermediation
  • Prudential regulation
  • Monetary policy after the crisis
  • The interaction between monetary, prudential and fiscal policies.

The papers that were selected and that will be presented today offer important and high quality contributions to the current academic and policy debates. We have a mixture of empirical and theoretical papers that were grouped into four sessions. These are:

  • Stress-testing the banking system
  • Bank capital and crises
  • Savings and real-estate wealth
  • Bank funding and lending

These papers are built upon many of the lessons learned in the 10 years since the collapse of Lehman Brothers and also on what policymakers have changed since then, with stricter requirements on capital and reinforcement of risk prevention and reduction, aimed at improving banks’ resilience.

Sound conceptual frameworks and lots of supporting evidence are needed to build a stock of knowledge that stands the test of time. Central bankers rely on these valuable inputs to develop or refine existing micro and macro prudential rules and sustain regulatory policy recommendations. For central bankers the challenge is to make sure that not only that the existing framework provides indeed stronger safety nets for the financial system when facing similar risks but also that the banking system has the capacity to finance investment and growth.

To conclude I would like you to know that I believe that your papers will surely help us be better prepared for the challenges ahead. 

I wish you all a pleasant stay in Lisbon.