Navigating financial stability challenges from geoeconomic fragmentation and digital innovation

Registration and coffee

Welcome address

Kirstin Hubrich, Deutsche Bundesbank, will open the workshop with a welcome address to participants.

Special address

Thorsten Beck, European University Institute, will set the scene with a high-level framing of the financial stability implications of geoeconomic fragmentation and AI, linking academic insights and policy implications.

Moderator: Kirstin Hubrich, Deutsche Bundesbank 

Session 1: Measuring geoeconomic fragmentation and its impact on the  macroeconomy

This session will discuss new analytical frameworks and empirical findings on the measurement of geopolitical shocks and their macroeconomic effects.

Chair: Thilo Liebig, Deutsche Bundesbank

Paper: Economic narratives and realities of geopolitical risk

Presenter: Sarah Arndt, Deutsche Bundesbank

Co-authors: Yevheniia Bondarenko, Deutsche Bundesbank, Vivien Lewis, Deutsche Bundesbank, Matthias Rottner, Bank for International Settlements, Yves Schüler, Deutsche Bundesbank

Discussant: Yasin Mimir, European Stability Mechanism

Paper: The macroeconomic impact of geopolitical hybrid risk

Presenter: Norbert Metiu, Deutsche Bundesbank

Co-author: Martin Völpel, Deutsche Bundesbank

Discussant: William Gatt, Bank Ċentrali ta’ Malta

Coffee break

Session 2: Geoeconomic fragmentation. Micro-econometric analysis of bank intermediation

The session provides novel micro-econometric evidence on how geopolitical shocks affect bank lending and firm-level dynamics.

Chair: Thorsten Beck, European University Institute

Paper: Geopolitical risk, bank lending and real effects on firms: Evidence from the Russian invasion of Ukraine

Presenter: Cosimo Pancaro, European Central Bank

Co-authors: Pauline Avril, European Central Bank, Peter McQuade, European Central Bank, Alessio Reghezza, European Central Bank

Discussant: Helinä Laakkonen, Suomen Pankki – Finlands Bank

Paper: Violent conflict and cross-border lending

Presenter: Iliriana Shala, Deutsche Bundesbank

Co-authors: Ralph De Haas, European Bank for Reconstruction and Development, Mikhail Mamonov, Toulouse Business School, Alexander Popov, European Central Bank

Discussant: Jan Hannes Lang, European Central Bank

Lunch

Session 3: Geoeconomic fragmentation. Analysis of the effects beyond banking

The session explores the response of capital flows and exchange rates to geopolitical and protectionist shocks, examining investor reactions across global financial markets.

Chair: Tuomas Peltonen, ESRB Secretariat

Paper: Geopolitical risk: when it matters; where it matters. Evidence from international portfolio allocations

Presenter: Enrico Mallucci, Central Bank of Ireland

Co-author: Nathan Converse, Board of the U.S. Federal Reserve

Discussant: Eeva Kerola, Suomen Pankki – Finlands Bank

Paper: Exchange rate responses of emerging markets to expected protectionist U.S. trade policies

Presenter: Stefan Eichler, TU Dresden

Co-authors: Jantke de Boer, Ruhr-Universität Bochum

Discussant: Ján Klacso, Národná banka Slovenska

Coffee break

Invited speech

Anton Korinek, University of Virginia, will deliver a speech on AI and financial markets, highlighting academic research on how AI could influence financial sector dynamics.

Moderator: Katja Taipalus, Suomen Pankki – Finlands Bank 

Session 4: Overview of AI-related work by key policy-making bodies

The session discusses ongoing work on the implications of AI led by key policy-making institutions.

Chair: Haoshen Hu, BaFin

Paper: Good AI, bad for banks?

Presenter: Stefan Kerbl, Oesterreichische Nationalbank

Discussant: Fabian Rose, Deutsche Bundesbank

Keynote speech

Jesús Fernández-Villaverde, University of Pennsylvania, will deliver a keynote speech that concludes the workshop with a macro-financial perspective on the dual challenges from geoeconomic fragmentation and AI. 

Moderator: Paul Hiebert, European Central Bank

End of workshop