PER Distinguished Lecture Series: Xavier Vives
April 25, 2017 - 6:00pm - 7:30pm
1512 International Affairs Building
420 West 118th StNew York, NY 10027
Competition and Stability in Banking: A Post-Crisis Perspective
Does too much competition in banking hurt society? What policies can best protect and stabilize banking without stifling it? Institutional responses to such questions have evolved over time, from interventionist regulatory control after the Great Depression to the liberalization policies that started in the United States in the 1970s. The global financial crisis of 2007–2009, which originated from an oversupply of credit, once again raised questions about excessive banking competition and what should be done about it. Competition and Stability in Banking addresses the critical relationships between competition, regulation, and stability, and the implications of coordinating banking regulations with competition policies.
Xavier Vives argues that while competition is not responsible for fragility in banking, there are trade-offs between competition and stability. Well-designed regulations would alleviate these trade-offs but not eliminate them, and the specificity of competition in banking should be accounted for. Vives argues that regulation and competition policy should be coordinated, with tighter prudential requirements in more competitive situations, but he also shows that supervisory and competition authorities should stand separate from each other, each pursuing its own objective. Vives reviews the theory and empirics of banking competition, drawing on up-to-date analysis that incorporates the characteristics of modern market-based banking, and he looks at regulation, competition policies, and crisis interventions in Europe and the United States, as well as in emerging economies.
Xavier Vives is professor of Economics and Finance at IESE Business School. He holds a Ph.D. in Economics from UC Berkeley.
Fellow of the Econometric Society since 1992; of the European Economic Association since 2004; and of the Academia Europaea since 2012. President of the European Association for Research in Industrial Economics 2016-2018. Research Fellow of CESifo and of the Center for Economic Policy Research, where he served as Director of the Industrial Organization Program in 1991-1997. He has taught at INSEAD, Harvard University, Universitat Autònoma de Barcelona, Universitat Pompeu Fabra, the University of California at Berkeley, the University of Pennsylvania, and New York University.
His fields of interest are industrial organization and regulation, the economics of information, and banking and financial economics. He has published in the main international journals and is the author of several books, among them Competition and Stability in Banking (PUP, 2016). He is currently co-editor of the Journal of Economics and Management Strategy and editor of the Journal of Economic Theory.
Dr. Vives has been an advisor and consultant on competition and regulation issues for the World Bank, the Inter-American Development Bank, the European Commission, the Federal Reserve Bank of New York, as well as for major international corporations. In 2011-2014 he was Special Advisor to the EU Commissioner for Competition, Mr Joaquín Almunia.
Sponsored by the Program for Economic Research and the Initiative on Central Banking and Financial Policy, School of International and Public Affairs