Xavier Freixas: "The next financial crisis will be different and our responsibility is to prevent the irrationality that precedes it"



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## Xavier Freixas: "The next financial crisis will be different and our responsibility is to prevent the irrationality that precedes it"

12/11/2019 |
SCP

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* [![ conferencia-xavier-freixas Xavier_Freixas_19DLL08_in](/com/noticies/2019/11/1q/conferencia-xavier-freixas/Xavier_Freixas_19DLL08_in.jpg)](#)

Xavier Freixas, Professor of Financial Economics and Accounting and winner of the Rei Jaume I Prize for Economics 2018, analysed banking crises and how to detect them during a lecture organised by the Ciutat de Castelló Chair. Professor Freixas began by explaining the costs of a banking crisis, such as the reduction of economic growth, a higher fiscal cost and indirect costs like zombie banks, the reduction of credit or the low cost of assets. “The past banking crisis and its recapitalisation has had a high cost per capita, i.e., each citizen in Spain has paid €851 to rescue the banks”, he stressed. “With the last financial crisis we can predict if the perfect storm can happen again, taking into account conditions such as macro-financial fragility, the contagion situation and a detonator”, he added.

According to Freixas, the best predictors for detecting a financial crisis are the appearance of financial bubbles, excessive indebtedness, the inflow of foreign capital and excessive credit growth. That is why he warns, "the next financial crisis will be different and our responsibility is to prevent the irrationality that precedes it, since regulation can help, but only if political intervention is limited".

Freixas holds a degree in Mathematics and Economics and a doctorate in Economics from the University of Toulouse. He is Professor of Financial Economics and Accounting at Pompeu Fabra University, where he was Dean of the Faculty of Economic Sciences between 2004 and 2008. He is also a research professor at the Barcelona Graduate School of Economics. Previously, he was a lecturer at the universities of Toulouse and Montpellier, as well as president of the European Finance Association.

His lines of research have focused on banking and the financial system, studying the role of banks in the allocation of resources and that of central banks as guarantors, financial regulations, the efficiency of the interbank market and systemic risks.

The most outstanding recognitions he has received are the distinction of the Generalitat de Catalunya for promoting university research (2002), the Michael Brennan prize for the best article in *The Review of Financial Studies* (2006) and the Rei Jaume I prize for Economics (2018) awarded by the Generalitat Valenciana.

[Photographs](https://www.uji.es/com/fotonoticies/arxiu/2019/11/cicle-conferencies-catedra-ciutat-castello-12-11-2019/)

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