Quo vadis financial markets?

"Quo vadis financial markets?" – High-ranking representatives from business, academia and public institutions met at Frankfurt School on 7 November to discuss this question and the pressing developments in the financial sector and their regulatory implications. The event was organised by the Frankfurt Competence Centre for German and Global Regulation (FCCR).

The conference's three panels covered the following questions:

1. Silicon Valley Bank, Credit Suisse & Co. – do we need further/tighter regulation?
2. Digital Currencies/Banking – where do we stand in industry, regulation and science?
3. Are our capital markets fit for financing the green transition?

Professor Thomas Weck, Professor of Public Law, Regulatory Law and Comparative Law, moderated the first panel. In an introductory presentation, Professor Thomas Weck and Finance Professor Maximilian Jager reconstructed the banking crisis in spring 2023 and the Credit Suisse case in particular, posing the question “Silicon Valey Bank, Credit Suisse & Co. – Do we need further/tighter regulation?”. This question was also discussed by the panellists, who included Maximilian Jager, Sabine Lautenschläger, former member of the Executive Board of the ECB, Mathias Hanten, partner at Deloitte and Dr Sebastian Merk, research associate at the Bundesgerichtshof, the German Federal Court of Justice. Essentially, all panellists agreed that we do not need more regulation. However, the question is how to strike the right balance between a principle-based approach and detailed regulation and what freedom, resources and discretion should be given to the supervisory authorities as executive bodies.

Katharina Paust-Bokrezion, Head of Payments Policy, Political Affairs at Deutsche Bank, opened the second panel with an overview of the development of money and payment systems towards the digital euro, which is currently being planned. She then discussed the question “Digital Currencies/Banking – where do we stand in industry, regulation and science?” with Dirk Schrade, Permanent Representative of the Head of the Central Division Payments and Settlement Systems at Deutsche Bundesbank, and Professor Tobias Berg from Goethe University. The relevance of a European alternative in the digital market dominated by American payment service providers was emphasised by all sides. However, there is still a need for discussion regarding the exact design of a digital euro, particularly with regard to the lack of disintermediation in the banking sector and broad acceptance among the population.

In the third and final panel, Christian Zahn, Co-leader of European Wealth & Asset Management at McKinsey, provided important food for thought for the panel “Are our capital markets fit for financing the green transition?” with his presentation. The panel with Professor Sascha Steffen, DWS Senior Chair in Finance at Frankfurt School, and Koen Holdtgrefe, Global Head Government & Regulatory Advocacy at Deutsche Bank, discussed the complex topic – often not with the greatest optimism. There is a need for action in all areas, be it in the expansion of the bond markets, the consolidation of marketplaces, the strengthening of a landscape for start-up financing – venture capital, private equity & co – or the restraint of the excessive regulatory initiatives such as the EU taxonomy.

The participants had the opportunity to continue the discussions at a concluding lunch.