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Finance and the Real Economy: Together or Apart?

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Erwin-Schrödinger-Saal
Plenary / Debate
German and English language

Have parts of the financial sector become separated from the other sectors of the economy and do, thus, no longer meet the requirements of the real economy? Which role do regulatory deficits and excessive public debt play in this development? How can we ensure that similar crises will not arise again in the future?

Speakers

Founder and Chief Executive Officer, Beyond Global, LLC, New York Abstract
Global growth has been weak and real economies remain fragile while stock markets have been rallying. This disconnect reflects the dichotomy between economic fundamentals and market speculation. Financial institutions have fueled speculation by engineering opaque financial instruments and employing massive leverage. Central banks have exacerbated this speculation and, by creating excess liquidity, potential bubbles. In addition, these policy measures have distorted fundamentals and market price mechanisms. In contrast, participants in the real economy have become more risk-averse due to uncertainty and the lack of confidence. The economy has become less dynamic as companies are abstaining from investments and individuals are shying away from entrepreneurial risks. More fundamentally, the underlying issue is the increasing wealth gap, which has been forming over the past 40 years. In the course of globalization, more power has been concentrated in the hands of ever fewer institutions and individuals. Meanwhile, pressing issues like low-growth, record unemployment and unfavorable demographics remain unresolved. We have borrowed wealth from the future and pay-day has arrived. Will we be able to tackle these problems, and if so, how?
Secretary General, Finance Watch, Brussels Abstract
When we take a look at banks' balance sheets and macro figures about the European economy, it becomes quite apparent that large parts of the financial sector have become disconnected from the real economy: banks' balance sheets have grown much faster than the EU GDP over the past decade and the largest banks use less than a third of their balance sheet to serve non-financial corporations and households.
The problem is compounded by the fact that banks are not fully exposed to market forces: ultimately, taxpayers pay for the risks taken by institutions that are too big too fail, weakening public finances in the process. This was the case in 2008, and it still is today. The solution to this problem is threefold: making banks more resilient by requiring higher capital buffers and lower leverage, splitting essential activities that serve the real economy from purely financial activities, making sure in case of losses that when shareholders have been wiped out the losses are absorbed by creditors and not by tax payers.
Editor-in-Chief, Die Presse, Vienna Chair

Sandra NAVIDI

Founder and Chief Executive Officer, Beyond Global, LLC, New York

 Law degree, University of Cologne School of Law, Germany
 Master-of-Law in Banking Corporate and Finance law, Fordham University School of Law, USA
 
1999-2001 Manager, International Capital Markets Department, Deloitte & Touche
2001-2006 General Counsel, Muzinich & Company
2006-2008 Investment Banking, Scarsdale Equities, LLC
2009-2011 Director of Research Strategies, Roubini Global Economics, LLC
since 2011 Founder and Chief Executive Officer, BeyondGlobal, LLC

Thierry PHILIPPONNAT

Secretary General, Finance Watch, Brussels

1990-1994 Founding Partner, Exane stock brokers, Paris
1994-1997 Executive Director, UBS Ltd., London
2001-2004 Deputy Head of Equity Financing Structuring, BNP Paribas, Paris
2004-2006 Group Director and Head of Paris Strategic Business Unit, Member of Executive committee, Euronext, Paris and London
2006-2010 Business and Human Rights Campaigner, Member of Executive Board, Amnesty International France, Paris
2010-2011 Project Leader, Finance Watch project, Brussels
since 2011 Secretary General, Finance Watch, Brussels

Rainer NOWAK

Editor-in-Chief, Die Presse, Vienna

1992-1997 Study of History and Political Science (without completing)
1994 Freelancer "Vorarlberger Nachrichten"
1996 Entry to "Die Presse"
2002 Editor, Domestic Policy Department, "Die Presse", Vienna
2004 Appointment to Department head "Chronik/Wien", "Die Presse", Vienna
2009 Appointment to Editorial Director for the new "Presse am Sonntag", Vienna
2010 Appointment to Head of Domestic Policy, "Die Presse", Vienna
since 2012 Editor-in-Chief, "Die Presse", Vienna
since 2014 Publisher, "Die Presse", Vienna
2017 Appointment as Managing Director, "Die Presse", Vienna

Economic Symposium

show timetable

27.08.2013

14:00 - 14:20OpeningPlenary
14:20 - 15:30Finance and the Real Economy: Together or Apart?Plenary
15:30 - 15:50Political CornerPlenary
16:50 - 18:30Making Finance Meet the Real Economy's RequirementsPlenary
20:30 - 21:30Miha Pogacnik: What Businesses can Learn from MusicPlenary
21:30 - 22:30Smart Blue Hour hosted by IBMSocial

28.08.2013

08:00 - 08:45Sustainable Entrepreneurship - Book Presentation on the Business Model of the FuturePartner
08:00 - 08:45management club Business Breakfast "Integrationsfall Europa"Partner
09:00 - 10:10The Future of Corporate FundingPlenary
10:10 - 10:30Political CornerPlenary
11:00 - 13:30Working Group 01: The Real Economy and Finance in the "Network of Responsibility"Breakout
11:00 - 13:30Working Group 02: Business, Society and Politics: Assigning Responsibility for ResultsBreakout
11:00 - 13:30Working Group 03: What Happens to Our Values if Computers Learn how to Think?Breakout
11:00 - 13:30Working Group 04: Touch the Future - Security and Identity in a Digital WorldBreakout
11:00 - 13:30Working Group 05: Living with Risk and SpeculationBreakout
11:00 - 13:30Working Group 06: The Pension System as a Ponzi Scheme?Breakout
11:00 - 13:30Working Group 07: Workforce Diversity: Living with and Managing Demographic ChangeBreakout
11:00 - 13:30Working Group 08: Implementing the New World of Work, a Progress ReportBreakout
11:00 - 13:30Working Group 09: Design Thinking as a Tool for InnovationBreakout
11:00 - 13:30Working Group 10: New Energies for Europe - Between Cooperation and CompetitionBreakout
13:30 - 14:30Lunch ReceptionSocial
14:30 - 17:00Working Group 11: Connected Learning, Connected SchoolsBreakout
14:30 - 17:00Working Group 12: Financial Literacy, Decision-Making in Complex SituationsBreakout
14:30 - 17:00Working Group 13: Our Life After the Digital RevolutionBreakout
14:30 - 17:00Working Group 14: Prosperity for All? Austria's Top Managers in Dialogue with Ludwig ErhardBreakout
14:30 - 17:00Working Group 15: Rethinking Capitalism: The Future of Our Economic ModelBreakout
14:30 - 17:00Working Group 16: Alternative Sustainable Economic ConceptsBreakout
14:30 - 17:00Working Group 17: From Goodwill to Financial Company ValueBreakout
14:30 - 17:00Working Group 18: Back to the Real Economy - Towards a New Industrial Policy for EuropeBreakout
14:30 - 17:00Working Group 19: Industrial Production in the City of the FutureBreakout
14:30 - 17:00Working Group 20: Rating Agencies Between Governments and BusinessesBreakout
18:00 - 19:30Peter Drucker Special Lecture: Leadership and Values in a Complex WorldPlenary
21:30 - 23:30get2gether hosted by T-MobileSocial

29.08.2013

08:30 - 09:00"Kater" BreakfastPartner
09:15 - 10:15The New Role of Central Banks in Crisis-ManagementPlenary
10:45 - 12:20New Growth in Europe?Plenary
12:20 - 12:30ClosingPlenary
16:45 - 20:00Generali 3 Banken Business Dialogue "Experiences and Values"Partner