Today Professor Markus K. Brunnermeier – the Edwards S. Sanford Professor of Economics of Princeton University – gave the twelfth Paolo Baffi Lecture on ‘Financial Dominance’, i.e. the tendency of the financial system, in the absence of appropriate regulation, to accumulate an insufficient quantity of capital and to make public intervention necessary to absorb its financial losses (including by recapitalizing financial intermediaries).
The Bank of Italy instituted the Baffi Lectures as a forum for original work by eminent scholars on money and finance.
