Eric Schaanning heads the Market Risk & Valuation Risk Management functions for the Nordea Group. Prior to this role, he worked at UBS / Credit Suisse in Zurich and before that I worked for the European Systemic Risk Board (ESRB) and Norges Bank. His research focuses on (reverse) stress testing, systematic vulnerability identification and systemic risk. I enjoy finding innovative solutions to practical risk management questions faced by financial institutions and policy makers.
As an undergraduate Economics student, I fell in love with economics of money. What drives the supply of money. What drives demand. Well before I learned double-entry bookkeeping and accrual accounting, I discovered T-accounts. The miracle of fractional reserve banking and of course, the incredible power of central banks - who can make and destroy money at the stroke of a pen. I used to love reading journals like the Journal of Monetary Economics, and the Journal of Finance (along with JPE. EJ and other, more standard journals).
Upon leaving academic economics, I left that world behind. But now I feel like my world might be coming full circle. I recently met @EricSchaanning and was delighted to welcome him to my podcast. Originally a math student at the @ETH, his PhD from @imperialcollege was in Risk Management and Financial Stability. He has done work at @NorgesBank, @UBS and has written papers on risk with staff at the @IMFNews , the @ECB and more. For our first bout, we recorded three episodes - the number one just went live. I hope that some of you money, risk and central banking geeks out there enjoy listening to it as much as Eric and I had talking about it.
Full transcript available here: https://aqfd.docsend.com/view/bxtu77b955d6grcy
Contents:
(00:00:00) Asset Liability Management & Interest Rate Risk in the Banking Book
(00:06:03) A Case Study in Interest Rate Risk and Asset-Liability Mismatches
(00:14:24) Liquidity, Insolvency, and Interest Rate Risk
(00:20:15) The Mechanics of Bank Balance Sheets
(00:32:24) Bank Balance Sheets, Loan Reporting, and Equity Capital
(00:49:28) Exploring the Dynamics of Fractional Reserve Banking, Interest Rate Risk, and Regulatory Frameworks
(01:03:30) From Pillar One to Pillar Three: Regulatory Safeguards and Banking Risk
