Harald Benink on bank buffers, mountains of debt and the risk of a new euro crisis

In this episode, Paul Buitink talks to Harald Benink. Harald is Professor of Banking and Finance at Tilburg University and senior research associate at the Financial Markets Group of the London School of Economics. He also contributed to the 2014 book Banks, Buffers and Taxpayers, which includes a dialogue between Dutch bankers, policymakers and academics in response to the credit crisis in 2008.

In this conversation, Harald analyses the risks within the financial system and explains the role of banks in all of this. For example, banks have reduced their capital buffers over the years, resulting in a more fragile system. Harald argues for higher, unweighted buffers. He also discusses the latest Basel agreements and what consequences this has for the buffers that banks must maintain. Finally, he talks about the future of the eurozone and the EU and explains in detail which option the Netherlands has for each scenario. He is not in favour of leaving the euro and argues for more funds from Brussels. Harald, like the IMF, is concerned about the fragility of the financial system and the eurozone.