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Thursday, 16 April 2015

Lessons from Ireland’s financial crisis

Alexandra Zeitz (Global Economic Governance Programme, University of Oxford)

What lessons can be learned from the Irish financial crisis? The question is particularly pressing as negotiations continue over the terms of the Greek bailout. Speaking at PEFM in early March, Ajai Chopra offered an insider’s perspective on the crisis and rescue, and shared words of caution about treating the Irish experience as a model that can be replicated elsewhere. Chopra, now with the Peterson Institute for International Economics, was head of the IMF’s mission in Ireland and had a front seat to the crisis and negotiations over policies for recovery.

Linking corporate governance to financial crisis?

Alexandra Zeitz (Global Economic Governance Programme, University of Oxford)

Popular accounts of the 2008-2009 financial crisis have squarely blamed the crisis on shoddy corporate governance; newspaper headlines targeted greedy bankers and sloppy executives. Academic analysts have sought to investigatethe relationship between management and financial stability in a more nuanced fashion, studying how corporate governance structures might affect risk-taking, short-sightedness, and other behaviours contributory to crisis. In Kevin James and Dimitrios Tsomocos’ February 26 PEFM presentation and the subsequent discussion, it became clear that economists have yet to settle on an empirical account of exactly how governance matters. While most in the room agreed that corporate governance matters for financial stability and growth, the challenge appears to be how to measure and encourage good corporate governance.