structures that are conducive to innovation, which may include a higher share of equity - finance relative to debt finance. second, financing the climate transition calls for bringing together private and public funding. principles need to be developed of how this can be done while ensuring debt sustainability, incentivising private financing, stimulating innovation and, at the same time, preventing a misallocation of resources or excessive risk - taking in the financial sector. third, as we enter a period of de - globalisation, surveillance of risks to financial stability needs to focus on fragmentation, which could make the financial system more fragile and increase the risk of contagion. [ 17 ] also, the link between international trade integration and financial integration needs to be better understood. fourth, we need to understand how policies beyond financial regulation affect financial stability. frictions in the real economy that delay the process of structural change may put a burden on banks ’ balance sheets and ultimately impair the functioning of the financial system. unviable firms in the real economy may not be forced to exit the market, while new, innovative firms may face barriers to entry if their business model threatens incumbents. [ 19 ] competition policy has an important role to play in ensuring that markets are contestable. fiscal policy needs to be carefully designed such that market entry and exit are not impaired. supporting firms that are not viable in the long - run may eventually have a negative effect on the balance sheets of financial institutions and impact their ability to finance the transition. at the current juncture, policymakers have to deal with many urgent issues all at once. it is now more important than ever for policymakers and academia to work together more closely – by defining the most relevant questions, enriching public policy debates with insights from academia, and thereby helping to find answers to questions faced by today ’ s societies. fußnoten : 1. my heartfelt thanks go to benjamin weigert, matthias weiß, and johanna winkel for their valuable contributions and comments on an earlier version of this text. any remaining errors and inaccuracies are entirely my own. 2. see https : / / www. imf. org / en / publications / weo / issues / 2022 / 04 / 19 / world - economic - outlook - april - 2022 [ https : / / www. imf. org / en / publications / weo / issues / 2022 / 04 / 19 / world - economic - outlook -

financial stability implications of the current geopolitical situation cepr paris symposium : panel on systemic risk : where is the next financial crisis coming from? 02. 06. 2022 | paris | claudia buch thank you very much for inviting me to speak here at the cepr ( center for economic and policy research ) symposium and particularly on this panel in honour of richard portes. richard ’ s work has been tremendously important for the economics profession in europe. the centre for economic policy research has been a central hub for innovative research and constructive policy discussions ever since its foundation in 1983. i remember very well the many bundesbank conferences – particularly at our conference centre in eltville – that richard attended. his contributions to the debates were always extremely insightful, based on excellent research of his own and his network, but they also highlighted the political constraints and relevant issues surrounding real - world policy decisions. and, like others on this panel, i have learned a great deal from richard during our work for the european systemic risk board. so : thank you very much richard for all that you have done for our profession, for bringing expert minds together, and for improving research and evidence - based policy - making in europe. we look forward to working with you in the same spirit in the future. more than ever, we need both – good research on society ’ s most pressing issues and evidence - based policymaking. today ’ s panel is about the origins of the next financial crisis. clearly, our job would be much easier if we had an answer to this question. if we knew what risks were highly likely to materialise, we would simply concentrate on monitoring those risks, mitigate the associated vulnerabilities within the financial system, and ensure that the system is sufficiently resilient. at the current juncture, however, assigning probabilities to specific risk scenarios and quantifying their impacts is hardly feasible. the international monetary fund ’ s recent world economic outlook gives a long list of risks to the economic outlook, and many of these risks are highly correlated. today, i would like to make three points : first, the global financial system has weathered the storms of the pandemic quite well. risks in the financial system were contained especially due to the massive public policy support that protected the real economy. also, the banking system has been more resilient thanks to the global financial sector reforms of the past decade. second, precisely because the financial system has performed well during the