Beck sees the current crisis more as the result of the failure of government rather than the market. Central bankers and bank supervisors, especially in the United States, reassured investors time and again that they would intervene with monetary and financial policies if circumstances so dictated.
These assurances gave bankers the leeway, even incentives, to take aggressive and imprudent risks. Beck suggests that in the future financial institutions be required to be more transparent and to take on more responsibility for their own risks. This approach is more fruitful than prohibiting certain activities, which will prevent society reaping the benefits of thriving financial markets.
Beck also argues that the nationalization of banks may currently be necessary, but that this process will not help by itself the sector regain health and independence in the long term. Bureaucrats are poor bankers, according to Beck, and nationalization should not be the first solution attempted. Private-market players must get involved in the resolution of these banks as quickly as possible in order to help the sector get back on its feet.
This is why Beck advocates establishing an institute at European level to monitor large financial institutions that operate across borders. An institution of this kind must have sufficient fiscal resources available, provided by the banks in question. This approach will help avoid European internal political conflicts at the time of crisis.
Thorsten Beck recently joined Tilburg University in the Netherlands from the World Bank in Washington, D.C. He is chairman of the European Banking Center, a research institute in Tilburg. His research has focused on two main questions: What is the relationship between financial development and economic development? What are the ingredients of an efficient and stable financial system? He holds a master degree from Germany and a Ph.D. from the University of Virginia. During his time at the World Bank, Beck has accumulated significant experience in financial sector policy work across Africa and Latin America, but also in Russia and China.
Corine Schouten | alfa
Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO
Europe's microtechnology industry is attuned to growth
10.03.2017 | IVAM Fachverband für Mikrotechnik
More and more automobile companies are focusing on body parts made of carbon fiber reinforced plastics (CFRP). However, manufacturing and repair costs must be further reduced in order to make CFRP more economical in use. Together with the Volkswagen AG and five other partners in the project HolQueSt 3D, the Laser Zentrum Hannover e.V. (LZH) has developed laser processes for the automatic trimming, drilling and repair of three-dimensional components.
Automated manufacturing processes are the basis for ultimately establishing the series production of CFRP components. In the project HolQueSt 3D, the LZH has...
Reflecting the structure of composites found in nature and the ancient world, researchers at the University of Illinois at Urbana-Champaign have synthesized thin carbon nanotube (CNT) textiles that exhibit both high electrical conductivity and a level of toughness that is about fifty times higher than copper films, currently used in electronics.
"The structural robustness of thin metal films has significant importance for the reliable operation of smart skin and flexible electronics including...
The nearby, giant radio galaxy M87 hosts a supermassive black hole (BH) and is well-known for its bright jet dominating the spectrum over ten orders of magnitude in frequency. Due to its proximity, jet prominence, and the large black hole mass, M87 is the best laboratory for investigating the formation, acceleration, and collimation of relativistic jets. A research team led by Silke Britzen from the Max Planck Institute for Radio Astronomy in Bonn, Germany, has found strong indication for turbulent processes connecting the accretion disk and the jet of that galaxy providing insights into the longstanding problem of the origin of astrophysical jets.
Supermassive black holes form some of the most enigmatic phenomena in astrophysics. Their enormous energy output is supposed to be generated by the...
The probability to find a certain number of photons inside a laser pulse usually corresponds to a classical distribution of independent events, the so-called...
Microprocessors based on atomically thin materials hold the promise of the evolution of traditional processors as well as new applications in the field of flexible electronics. Now, a TU Wien research team led by Thomas Müller has made a breakthrough in this field as part of an ongoing research project.
Two-dimensional materials, or 2D materials for short, are extremely versatile, although – or often more precisely because – they are made up of just one or a...
20.04.2017 | Event News
18.04.2017 | Event News
03.04.2017 | Event News
27.04.2017 | Life Sciences
27.04.2017 | Physics and Astronomy
27.04.2017 | Earth Sciences