Professor of Banking
Jean-Charles Rochet is Full Professor of Banking at the University of Zurich and has held an SFI Senior Chair at the University of Zurich since 2010. He became SFI Head of Research in 2015. Before joining the faculty in Zurich, Prof. Rochet held a chair at the Toulouse School of Economics.
His research interests lie in banking crises and regulation.
Prof. Rochet and his co-authors have recently focused on the question of sovereign debt sustainability in advanced economies. In the aftermath of the 2008 financial crisis, many economies experienced a large increase in their debt-to-GDP ratio. The challenge is to determine how much investors are willing to lend to a country’s government. To answer this question, the researchers develop a model in which a country’s maximum sustainable debt depends on that country’s maximum primary surplus, on the mean and volatility of the country’s GDP growth, the country’s attitude toward repayment, and lenders’ expectations regarding the amount of new debt that can be raised to service existing debt. In a nutshell, data reveals that Greece and Iceland did indeed need financial support, but Ireland and Spain probably did not.