In her opening speech at the 10th ECB Annual Research Conference, Christine Lagarde, President of the European Central Bank, stressed that despite constant transformation in the financial system, the nature of risks does not change – old problems reappear in new forms. The conference, co-organised with Stanford’s Hoover Institution, is provocatively titled “The Next Financial Crisis?” – with a question mark to signal inquiry rather than prediction.
Key points from Lagarde’s address:
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One of the biggest structural shifts has been the rise of non-bank financial institutions (investment funds, insurers, money market funds), which now account for more than 60% of the euro area’s financial sector.
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Banks face mounting pressure from technology, including fintechs, stablecoins, and the amplification of panic through social media.
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The interconnectedness between banks and non-banks increases systemic risks.
Lagarde underlined that regulation and supervision are not meant to hold back innovation but to keep risks under control, so that innovation can thrive safely. The EU is pursuing a simplification agenda, which focuses on making oversight more efficient, not on deregulation.
The conference begins with a keynote by Raghuram Rajan on the relationship between monetary policy and financial stability.
Lagarde closed by citing Jean-Baptiste Alphonse Karr: “The more things change, the more they stay the same.”
Core message: The financial system may change rapidly, but the risks remain essentially the same – making research, regulation, and supervision crucial to preserving stability.
