Aims and scope. Analysing the financial system as a network of actors and contracts provides crucial insights into how regulators and practitioners can address risk and into the role financial actors can play in the pathway towards a more sustainable and inclusive economy.
Audience and Agenda. The first FINEXUS Conference aims to bring together scholars, policy makers and civil society to stir the debate on the nexus among financial stability, environmental sustainability and financial inclusion, based on insights from the rapidly growing scientific field of Financial Networks. The day of Wednesday January 12th is devoted to the general public, with an evening round-table hosting the Nobel Laureate Joseph Stiglitz. The day of Friday January 13th is devoted to scientific presentations on the recent developments in the field of financial networks and policy applications to financial stability and sustainability.
Background. Our understanding of financial stability and macroprudential policies cannot prescind today from regarding the financial system as a network in which both positive and negative shocks may ripple along chains of counterparties depending on market liquidity and other factors. The tension between risk diversification at the level of individual institutions and the building up of systemic risk in the presence of uncertainty on the value of collateral or on default resolution cannot be fully understood without network models. Moreover, there is a growing consensus that financial sustainability and environmental sustainability are interconnected dimensions. Indeed, on the one hand, the transition to a more sustainable economy implies deep transformations, which can potentially affect large portions of global financial assets. In this context, a well-managed transition is expected by many to improve the well-being of citizens and bring new opportunities for businesses, while a badly-managed transition will likely entail systemic risk, in particular for the financial system. On the other hand, as witnessed by the recent initiatives, such as the Financial Stability Board task force on climate-related financial disclosure, the financial sector could play a key role in fostering the transition, in particular through the developing market of climate-finance instruments. However, the transition to a more sustainable economy could be hampered by the growing inequality observed across developed countries and the resulting economic and political instability. In this respect, the role of economic policies and civil society should not be underestimated.
Venue: University of Zurich
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