New Banking Research Program Launched with Citi

IESE is launching a new banking initiative, with the support of Citi, that will establish a group of first-rate researchers to study post-crisis developments of banking and financial markets, paying particular attention to regulation and competition policy and the impact on business banking models.

The project aims to promote a rigorous and informed dialogue on current issues in the fields of banking and financial markets among academics, regulators, companies and civil society.

“The generation of new ideas in a critical industry such as banking is indispensable for a dynamic society and the proper development of large, established companies and entrepreneurial ventures as well. With the support of Citi, we will put together a group of world-class scholars thinking about this very important industry,” said Dean Franz Heukamp.

Citi’s Global Head of Markets and Securities Services, Paco Ybarra, said, “We are delighted at Citi to support IESE in the production of world-class research and insights on the future of the banking industry. Building an informed dialogue between academics, regulators and the banking industry is critical to enhancing trust in the financial services sector and in shaping banks that truly enable growth and progress.”

Impact of Technology, Economics, Regulation and More

The origin of the initiative lies in the annual Future of Banking Conference that IESE launched in London in 2014 to help improve research on the governance and management of banks.

With an initial horizon of four years, the program will be a reference point in banking and financial studies and will focus on issues that will be crucial to understanding the evolution of these sectors. In particular, an annual report on the future of banking will be produced.

Examples of research areas include:

• The transformation of business models in the different banking segments due to the impact of technological change, macroeconomic developments and regulation.
• The effect in financial markets of High Frequency Trading (HFT) and the optimal structure of competing exchanges.
• The interaction of the market structure of interbank markets and loan and deposit markets, and implications for central bank policy.
• The impact of resolution methods on the structure of the banking firm (e.g. SPOE vs MPOE resolution strategies).
• The impact of the reform of banking structure (Dodd Frank, Liikanen, Vickers) on the provision of market liquidity.
• The interaction of capital, liquidity and transparency requirements on the banking firm.
• The potential effects of the post crisis increase in concentration in retail markets.
• How does the ownership structure of banks effect competition in the market?
• The interaction between new entrants, such as Fintech providers, established banks and the regulatory implications stemming from this.

Professor Xavier Vives will be academic director of the program. He will lead the initiative alongside other IESE professors and an international network of distinguished banking scholars.