28th SUERF Colloquium - The Quest for Stabliity (SUERF C28)

Venue: Utrecht University School of Economics

Location: Utrecht, Netherlands

Event Date/Time: Sep 03, 2009 End Date/Time: Sep 04, 2009
Registration Date: Aug 15, 2009
Early Registration Date: Jun 30, 2009
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In the intrinsically dynamic environment that characterises modern market economies, economic agents are constantly
seeking for reliable signals that help them to make informed decisions. It is in this sense that most investors, consumers,
producers and financial institutions prefer stability to instability. In ever-changing market economies stability, however,
spans several dimensions and has several meanings. A stable macro-economic environment characterised by, among
other things, a properly functioning price mechanism and stable prices is one of these dimensions. Price stability however
should not be interpreted to mean that all individual prices should be kept constant, as price flexibility is pivotal to an
efficient allocation of resources. A second dimension along which stability is sought is reflected in the development of
markets for the transfer of risk. Providers of derivatives, insurance and pension products exist because their clients want
to stabilize their cash flows, income and wealth, or insure these flows against the negative financial consequences of
accidents, illness, unemployment, old age or unexpected movements in asset prices such as interest rates and exchange
rates. The existence of these insurance products and markets often is taken for granted. However, these instruments can
only exist when there is confidence in the soundness of the instrument, in the institution providing it and in the sector of
which the institution is part of. This brings us to the second and third dimensions of stability. The second or micro dimension
is based on prudent behaviour of institutions. Legislation, regulation and supervision are designed to induce institutions
to exhibit prudent behaviour. This provides the “raison d’être” for capital adequacy rules, deposit insurance and investment
diversification rules. The third or meso dimension is based on the premise that, due to the special nature of
financial institutions, i.e. they are based on trust and operate under asymmetric information, stability of its constituent
parts does not automatically render the system stable.
These three dimensions of stability – the macro, meso and micro perspective – are interdependent in that the one cannot
exist without the other. This interdependency is reflected in the structure of the 28th SUERF Colloquium, which is
organised in three commissions. The focus of the commissions is reflected in the headlines.


Additional Information

Free participation for 1 staff member of NEW Corporate Members of SUERF (EUR 1,000 p.a.). Non-members EUR 2,500 Staff Members of Corporate Members EUR 660 Personal Members EUR 300 Staff Members of Academic Institution Members EUR 120 Membership details and fees available at: http://www.suerf.org/membership0.asp