Objective "The financial crisis, since its start in 2008 has exposed enormous fractures both in the financial architecture and in the structure of the global economy. Although with some notable exceptions, the magnitude of the events caught the finance profession largely by surprise. Clearly, we have to understand better the institutional mechanism channeling savings towards the best uses of capital, and to what extent this mechanism can sometimes fail. The projects in this proposal will push the boundaries of our knowledge in this direction.I suggest a dual approach to achieve this goal. First, we have to improve our understanding of which frictions are the crucial impediments of the efficient functioning of markets. As this approach focuses on particular markets in isolation, I call this the micro approach. I propose three projects within this approach: trading and information diffusion in OTC markets, the crowdedness in limits-to-arbitrage, and the interaction of political uncertainty and sovereign bond prices.Second, from the frictions emerging from the micro approach, we have to select the ones which determine the aggregate liquidity fluctuations in the economy. I use this concept in a broad sense; referring to the changing efficiency with which the financial system allocates resources across investment opportunities. As this approach focuses on the functionality of the financial system as a whole, I call this the macro approach. I propose two projects within this approach. The first project focuses on the determinants of the differences in the financial architecture of different economies. It builds a novel framework to study the dynamics of the financial sector of an economy. The second project studies the role of shadow banking in the fluctuation of aggregate liquidity. In particular, this project concentrates on the fluctuation of the efficiency of private liquidity creation as the state of the economy changes." Programme(s) FP7-IDEAS-ERC - Specific programme: "Ideas" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013) Topic(s) ERC-SG-SH1 - ERC Starting Grant - Individuals, institutions and markets Call for proposal ERC-2013-StG See other projects for this call Funding Scheme ERC-SG - ERC Starting Grant Host institution LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE EU contribution € 908 914,25 Address Houghton Street 1 WC2A 2AE London United Kingdom See on map Region London Inner London — West Westminster Activity type Higher or Secondary Education Establishments Principal investigator Péter Kondor (Dr.) Administrative Contact Jonathan Deer (Mr.) Links Contact the organisation Opens in new window Website Opens in new window Total cost No data Beneficiaries (2) Sort alphabetically Sort by EU Contribution Expand all Collapse all LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE United Kingdom EU contribution € 908 914,25 Address Houghton Street 1 WC2A 2AE London See on map Region London Inner London — West Westminster Activity type Higher or Secondary Education Establishments Principal investigator Péter Kondor (Dr.) Administrative Contact Jonathan Deer (Mr.) Links Contact the organisation Opens in new window Website Opens in new window Total cost No data KOZEP-EUROPAI EGYETEM Participation ended Hungary EU contribution € 213 968,75 Address NADOR UTCA 9 1051 Budapest See on map Region Közép-Magyarország Budapest Budapest Activity type Higher or Secondary Education Establishments Administrative Contact Vanda Mohacsi (Ms.) Links Contact the organisation Opens in new window Website Opens in new window Total cost No data
