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New Sustainability: Can economic and financial crises be prevented?

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

Speakers

Director, Max Planck Institute for Research on Collective Goods, Bonn Abstract Key Note
New Sustainability: Can Economic and Financial Crises be Prevented?

The talk identifies causes of the financial crisis of 2007/2008 and measures to contain or even prevent such crises in the future. Important causes comprise the lack of incentive mechanisms in mortgage origination and securitization, excessive leverage and excessive maturity transformation at key financial institutions, and flaws in financial system architecture that induced the continued system implosion after the initial shock of August 2007. Needed corrective measures comprise increased capital requirements, stronger liability rules, including personal liability of bank board members, supervisory control of bonus systems, and last not least, workable mechanisms for dealing with problem banks.
Member of the Board of Executive Directors, OeKB - Oesterreichische Kontrollbank AG, Vienna
President, Federation of Austrian Industries, Vienna
Former President, Mont Pèlerin Society; Emeritus Professor of Economics, Paris-Dauphine University, Paris Abstract
Session "New Sustainability : Can Economic and Financial Crises be Prevented?"
To make it short, modern economic and financial crises are a consequence of state interventionism and, in order to avoid further crises in the future, the only way consists in going back to more capitalist systems. In fact these crises come mainly from the fact that monetary authorities pretend that it is possible to finance growth by distributing credits obtained by money creation. They believe that it is thus possible to compensate for a lack of savings. In reality state interventionism has destroyed incentives to save in many countries (except some important emergent economies such as China). But one cannot replace voluntary savings by illusory credits based on money creation. This is the cause of financial crises.

Under the pretext of stimulating the economy, monetary authorities implement expansionary monetary policies and impose interest rates which are much lower than what would correspond to the real scarcity of savings. Thus, they introduce disequilibria in economic systems, as is well illustrated by the recent crisis. Such policies induce investors to decide investments which would not be profitable normally and to take too many risks. When these disequilibria and distorsions in the structure of production are no more sustainable, the crisis occurs.

Therefore, in order to avoid crises in the future it is necessary to suppress the causes of these crises, which means radical changes both as regards policies concerning savings and monetary policies. As regards savings, it is necessary to decide radical tax reforms since, contrary to what is often believed, present tax systems are a main obstacle to capital accumulation. But it also implies shifting from pay-as-you-go pension systems to capitalization systems. As regards monetary policies, it is necessary to prevent monetary authorities from developing the illusions of expansionary monetary policies. But it would be even more efficient to suppress central banks and monetary authorities and to come back to systems of competing private currencies, as it has existed successfully in the past. In fact, contrary to what is usually believed, there is no need to create money and, therefore, no need to give to some organizations  in particular if they are public organizations  the power to create money and, even, a monopoly in this activity.

Note : These statements are developed in my recently published book, Revenir au capitalisme pour éviter les crises ("Coming back to capitalism to avoid crises"), Paris, éditions Odile Jacob, 2010.
Lektorin für Volkswirtschaft, Fachhochschule des bfi Wien GmbH, Wien
Head of Department Economy, Der Standard, Vienna Chair

Ph.D. Martin HELLWIG

Director, Max Planck Institute for Research on Collective Goods, Bonn

1973-1974 Research Associate in Economics, Stanford University
1974-1977 Assistant Professor of Economics, Princeton University
1977-1979 Associate Professor of Economics, University of Bonn
1979-1987 Professor of Economics, University of Bonn
1987-1996 Professor of Eonomics, University of Basel
1995-1996 Taussig Research Professor, Harvard University
1996-2004 Professor of Economics, Mannheim University
since 2004 Director, Max Planck Institute for Research on Collective Goods

Mag. Helmut BERNKOPF

Member of the Board of Executive Directors, OeKB - Oesterreichische Kontrollbank AG, Vienna

1987-1994 WU Vienna University of Economics and Business
1994-1997 Manager, Corporate Finance, Bank Austria AG
1997-2000 Assistant Director, Head of Loan Syndications, Bank Austria Creditanstalt International, London
2000-2001 Executive Director, Head of Corporate Banking, Bank Austria Creditanstalt Romania S.A., Bucharest
2001-2004 Deputy Chief Executive Officer, HVB Bank Romania S.A. (previously Bank Austria Creditanstalt), Bucharest
2005-2006 General Manager, Head of CEE Division, Bank Austria Creditanstalt AG, Vienna
2007-2008 Deputy Chairman, UniCredit Bank, Russia (previously International Moscow Bank); Acting Chairman of the Management Board
  Executive Vice President, Head of Corporate and Investment Banking Austria, UniCredit Group
2008-2011 Member of the Management Board, UniCredit Bank Austria AG
2011-2012 Global Head of Private Banking UniCredit S.p.A., Senior Executive Vice President, Member of Business Executive Committee, UniCredit Group
  Senior Executive Vice President, Head of Commercial Banking
2013-2016 Member of the Management Board, UniCredit Bank Austria AG
since 2016 Member of the Board of Executive Directors, OeKB, Oesterreichische Kontrollbank AG, Vienna

Mag. Georg KAPSCH

President, Federation of Austrian Industries, Vienna

1981 Studium der Betriebswirtschaftslehre, Abschluss, Wirtschaftsuniversität Wien
1982-1985 Marketing Konsumgüter, Kapsch AG
1986-1989 Marketing Investitionsgüter, Kapsch AG
seit 1989 Vorstandsmitglied, Kapsch AG, (Mitgliedschaft)
1987 Mitglied des Vorstandes der Landesgruppe Wien der Industriellenvereinigung
1988-1992 Vorsitzender von 1031 - Gruppe der jungen Unternehmer und Führungskräfte - Vereinigung der Österreichischen Industrie
seit 1996 Mitglied des IV-Bundesvorstandes
2000-2012 Stv. Obmann, Fachverband der Elektro- und Elektronikindustrie
seit 2001 CEO Kapsch-Gruppe
2002-2012 Obmann, Fachhochschule Technikum Wien
seit 2002 Vorstandsvorsitzender, Kapsch TrafficCom AG
2002-2012 Vorsitzender, Elektronik-Verband
2003-2008 Vizepräsident, Österreichischer Verband für Elektrotechnik
2008-2012 Präsident, Landesgruppe Wien der Industriellenvereinigung
seit 2012 Präsident, Industriellenvereinigung

Dr. Pascal SALIN

Former President, Mont Pèlerin Society; Emeritus Professor of Economics, Paris-Dauphine University, Paris

1965 Docteur en sciences économiques
  Licencié de sociologie
  Diplômé de l'Institut d'Etudes Politiques de Paris
  Maître de conférences-agrégé, University of Poitiers and University of Nantes
  Visiting Professor, The Bologna Center, Johns Hopkins University
  Consultant, International Monetary Fund , Harvard Institute for International Development, USAID, government of Niger
  Former president, The Mont Pèlerin Society
  Emeritus Professor, University Paris-Dauphine
1966 Agrégé de sciences économiques

Dr. Elisabeth SPRINGLER

Lektorin für Volkswirtschaft, Fachhochschule des bfi Wien GmbH, Wien

1998-2000 Universitätsassistenin, Institut für Geld und Finanzpolitik, Wirtschaftsuniversität Wien
1999-2002 Externe Lektorin für Volkswirtschaft, IMC Krems
seit 2003 Externe Lektorin für Volkswirtschaft, Bfi Wien
2003-2010 Universitätsassistentin, Institut für Geld und Finanzpolitik, Wirtschaftsuniversität Wien
2004-2005 Visiting Fellow, Abteilung für Volkswirtschaftliche Analysen, Österreichische Nationalbank
2005 Visiting Fellow, Berkeley
2008 Lektorin, University College Volda, Norwegen
2008-2009 Marshallplan Chair, Gastprofessur, University of New Orleans
seit 2008 Freie Mitarbeiterin am Institut für Immobilien, Bauen und Wohnen Wien
seit 2010 Externe Lektorin, Institut für Geld und Finanzpolitik, Wirtschaftsuniversität Wien

Andreas SCHNAUDER

Head of Department Economy, Der Standard, Vienna

1986 Studium der Handelswissenschaften, Wirtschaftsuniversität Wien
1989-1991 Trainee-Programm, Girozentrale
1992-1993 Hochschullehrgang für Journalismus, Institut für Publizistik, Universität Wien
1992 Volontariat (danach freier Mitarbeiter), Wirtschaftsressort, Der Standard
1994 Anstellung, Der Standard
1997 Stellvertretender Ressortleiter Wirtschaft, Die Presse
2003-2005 Korrespondent in Brüssel
seit 2005 Stellvertretender Ressortleiter Wirtschaft, Der Kurier
seit 2007 Ressortleiter Wirtschaft, Der Standard

Economic Symposium

show timetable

31.08.2010

14:00 - 14:30OpeningPlenary
14:30 - 16:30Managing the crisis in EuropePlenary
17:00 - 18:30New Sustainability: Can economic and financial crises be prevented?Plenary
19:00 - 20:30Special Lecture: How is the US reinventing itself?Plenary
20:30 - 23:00Reception hosted by the Tourism and Leisure Industries Division of the Austrian Federal Economic ChamberSocial

01.09.2010

09:00 - 10:30Economics: Between state, market and civil societyPlenary
11:00 - 12:30The win-win-potential of Economy and EcologyPlenary
15:00 - 16:3001 Krisenbewältigung: Sparen, konsumieren oder investieren?Breakout
15:00 - 18:0003 Neue Sehnsucht nach alten WertenBreakout
15:00 - 18:0004 Live-Simulation: "Neue Steuern braucht das Land!?"Breakout
15:00 - 18:0005 Gerechtigkeit in der Marktwirtschaft?Breakout
15:00 - 18:0006 Borrowing from the Future - Consequences of the CrisisBreakout
15:00 - 18:0007 Re-Set Universities! Hochschulen neu denkenBreakout
15:00 - 18:0008 Was heisst Management-Professionalität nach der Krise?Breakout
15:00 - 18:0009 Mit Mediation nachhaltig durch die Krise steuernBreakout
15:00 - 18:0010 One man's loss is another man's gain? Post-crisis challenges and opportunities in CEEBreakout
15:00 - 16:3011 Ökologische Revolution - Technologie statt IdeologieBreakout
15:00 - 18:0012 Elektromobilität: Neuer Antrieb aus der Krise?Breakout
15:00 - 18:0013 Innovation: Voraussetzung für eine erfolgreiche ZukunftBreakout
15:00 - 18:0014 Mit intelligenten Netzen aus der KriseBreakout
15:00 - 18:0015 Tourismus: Leitbranche mit Beschäftigungs- und Standortgarantie in ÖsterreichBreakout
17:00 - 18:3002 Die Zukunft der sozialen Sicherheit - Who cares?Breakout
19:00 - 20:30Peter Drucker Special Lecture: Innovation as the key to post-crisis managementPlenary
20:30 - 23:00Reception hosted by T-Systems Austria GmbH and T-Mobile Austria GmbHSocial

02.09.2010

09:30 - 11:45European economy and politics after the crisis: Challenges and opportunitiesPlenary
11:45 - 12:00Closing StatementPlenary