FINSYS RECOVERY · European financial systems in post-crisis recovery

European financial systems in post-crisis recovery

The project European financial systems in post-crisis recovery (FINSYS RECOVERY) aimed to understand how financial systems (FS) developed from 2005 to 2020 across European countries, and how crises affected the trajectories of the different countries’ FS during this period. FS profoundly affect societies and our everyday lives through resource accumulation and distribution, but the understanding of how they respond to shocks, evolve and embark on different paths is limited. The project provided a detailed view of European FS and their post-crisis trajectories, and quantitatively investigated how shocks in the shape of crisis events (e.g. the global financial crisis, the EURO crisis) and related policy responses influenced them. Insights on how and why FS evolve in response to shocks could hardly be timelier. There are ongoing political initiatives to promote deeper integration of EU FS, while at the same time counterfactors such as Brexit and nationalism appear to pull the EU apart. All this occurs against the backdrop of another major economic crisis, as the grip of the COVID-19 pandemic has tightened over our economies. The project was conducted at CBS´s EGB department which bases its research on international business, economics, and politics, and is an international research center of excellence on the interaction between states and markets, and how business and governments interact to influence each other. The overall conclusions from the project is that traditional dichotomous typologies of financial systems have become less suited to understanding contemporary financial systems. Instead, alternative typologies of institutional variation and transformation are proposed, allowing for a more complex and multi-dimensional understanding of financial systems and their evolution. The conclusions also demonstrate co-existence of multiple and different equilibria even within national geographical institutional configurations. Results also show that institutional transformation (and indeed sluggishness) is a fragmented process with incoherent consequences. These conclusions matter to the ongoing debates about how financial systems shape growth opportunities, the distribution of resources and opportunities in society and our everyday lives.

Data: CORDIS, © European Union