For once, the Kunsthaus Zurich’s role as a home for fine arts took a back seat. On 13 November 2019, it hosted a platform for knowledge exchange among practitioners and academics from the financial industry. In the presence of over 300 participants, renowned academics and finance practitioners shared their views on debt, growth, and resilience, at our Annual Meeting yesterday. 

The conference kicked off with a speech by Mr. Sergio P. Ermotti, Group Chief Executive Officer, UBS Group AG. He addressed the numerous factors influencing the business and thus ultimately the growth potential of Swiss banks. While the current negative interest rate environment and regulatory hurdles are exerting rather a negative impact, he pointed out that technological development as well as human knowledge can be viewed as drivers of future growth in the banking world.

More information on his speech can be found at the following media outlets: 

•    Finews "UBS: Heimlicher Strategiewandel?“ —14 November 2019 (in German) 

•    FuW "UBS-Chef Ermotti rechnet mit weiterer Konsolidierung"—13 November 2019 (in German)

•    L’Agefi "Le Swiss Finance Institute SFI se penche sur les défis de la dette"—13 November 2019 (in French) 

•    Bilan "Le patron d'UBS table sur une consolidation parmi les banques" —13 November 2019 (in French) 

Next, Nobel Laureate Prof. Bengt Holmström from the Massachusetts Institute of Technology (MIT) identified the global shortage of safe assets as a key factor in central banks’ continued negative interest rate policies and attributed this situation, among other causes, to a systemic asymmetry of information among the investor community. An interview with Prof. Holmström regarding his expert view can be found here: 

Allnews "Toute l’économie est affaire d’incitations"—14 November 2019 (in French). 

SFI Prof. Jean-Charles Rochet from the University of Geneva in his presentation mentioned the fact that global debt is at an all-time high, which itself raises new questions. Based on new research insights from SFI faculty, he proposed answers to those questions. SFI researchers have, for example, examined the impact of corporate debt on innovation and growth, the impact of Basel III on GDP growth in general and on bank resilience in particular, and addressed the maximum sustainable debt-to-GDP ratio for a country and whether the US dollar is going to continue its domination of debt markets. 

The Chairman of the Swiss Bankers Association, Mr. Herbert J. Scheidt, highlighted the importance of the banking sector, which he considers to be highly competitive. Switzerland’s banks are an important pillar of the country’s economy—not only due to their role as employers, taxpayers, and an economic driving force. He also stressed the need to talk about the perils of soaring public debt. Countries must find ways out of the debt trap. At the same time, central banks must preserve their independence.

In his closing remarks, our Chairman, Dr. Romeo Cerutti from Credit Suisse Group AG, emphasized the important role of SFI as a connector between academia and practice and reaffirmed the added value that results from this close integration between practice and academia. On behalf of the Institute, he warmly thanked Prof. René Stulz  (Ohio State University) for his distinguished contribution as Chair of our Scientific Council 2006‒2019 and had the pleasure of announcing the winners of the 2019 SFI Outstanding Paper Award.