As part of the CORE Nobel Talks, Prof. Bengt Holmström (MIT) is giving a seminar on "The Purpose and Perils of Money Markets – Lessons from the Financial Crisis". The seminar will be held at UCLouvain on October 17, 11:30 a.m. and will be introduced by Jan De Wit, Head of the Front Office of the National Bank of Belgium. The event will be followed by a walking lunch.
Abstract
All financial crises stem from a breakdown in money markets (markets for short-term debt). Money markets are fundamentally different from stock markets. Stock markets rely on price discovery to allocate risk efficiently. Money markets obviate the need for price discovery by using over-collateralised debt to reduce the cost of lending. The talk highlights the key role played by the information insensitivity of debt to create money-like securities and the risks associated with their excessive use. Looking at the financial crisis through this simple lens, is illuminating and leads to new insights about policies on transparency, on capital buffers and other regulatory issues concerning banking and money markets.
Prof. Bengt Holmström
Bengt Holmström, Professor of Economics at the Massachusetts Institute of Technology, is an internationally renowned scholar for his work on principal-agent theory. In 2016, he was awarded the Sveriges Riksbank Nobel Prize in Economic Sciences for his contributions to contract theory.
Practical information
Registration
Attendance is free but registration is mandatory. To register, simply fill out our online form by October 12.
Program
11:30-11:35 a.m.: Foreword by Jan de Wit, head of the front office of the National Bank of Belgium (Salle du Sénat Académique)
11:35 a.m. - 1:00 p.m.: Seminar by Prof. Bengt Holmström, MIT (Salle du Sénat Académique)
1:00-2:00 p.m.: Walking lunch (Salle de la Tâpisserie)
Venue
Salle du Sénat Académique (Halles Universitaires)
Place de l'Université, 1
1348 Louvain-la-Neuve
Organizers
Prof. Per Agrell, Dean of the Louvain School of Management
Prof. Philippe Chevalier, President of IMMAQ and CORE
Prof. Leonardo Iania, Louvain Finance