© Marcus Kaufhold

This year, the Bundesbank’s autumn conference in Frankfurt am Main focused on the challenges facing financial markets, financial intermediaries and central banks. The conference, which was organised by the Bundesbank’s Research Centre in cooperation with the Humboldt University of Berlin, hosted international guests and speakers from the Federal Reserve Bank, the European Central Bank, the Bank of England, King’s College London, Princeton and Bocconi University, among many more. Falko Fecht, Head of the Bundesbank’s Research Centre, welcomed the attendees and presented the speakers and their topics.

© Marcus Kaufhold

Evaluate the impact of measures

Bundesbank President Joachim Nagel addressed the participants via video message. In his speech, he recalled that since the global financial crisis, central banks have expanded their balance sheets worldwide, provided the financial system with additional liquidity and expanded their collateral frameworks. He added that financial market regulation has been adjusted to increase the stability of the financial system. Although these measures have been effective, they have also had side effects on the financial markets, Mr Nagel explained, stressing that policymakers and regulators would therefore be well advised to evaluate the impact of their measures.

© Marcus Kaufhold

Central bank digital currency in focus

Specifically, the first session of the conference discussed non-bank financial institutions, including insurance companies, investment funds, money market funds and hedge funds. The non-banking sector is highly interconnected, both with other sectors and across national borders. Annette Vissing-Jørgensen of the Federal Reserve Board spoke on “Balance sheet policy above the effective lower bound”. Other sessions focused on the topics of lending and deposit flows as well as central bank digital currency – the latter being a subject that central banks around the world are currently exploring. The Eurosystem itself is working on the digital euro project.

A fourth session discussed the impact of central bank interventions on market behaviour. The final panel discussion between Karsten Stroborn (Deutsche Bundesbank), Claudio Borio (Bank for International Settlements), Kjell G. Nyborg (University of Zurich) and Imène Rahmouni-Rousseau (European Central Bank) focused on the future of banks and the review of the ECB’s operational framework for implementing monetary policy.