Nobel Prize in Economics to three Americans for their research on banks and financial crises

Three American experts, including former Fed Chairman Ben Bernanke, received the Nobel Prize in Economics on Monday for their contributions to explaining the role of banks in the global economy. economyespecially the importance of preventing crashes during financial crises.

Bernanke, Douglas Diamond, and Philip Dybwig have been credited for “significantly improving our understanding of the role of banks in economyespecially during financial crisesas well as how to regulate financial markets,” the jury said.

“His analyzes were of great practical importance in regulating financial markets and overcoming crises,” the awards committee added.

Bernanke, 68, was chairman of the Federal Reserve from 2006 to 2014. financial crisis 2008 and was noted for his analysis of “the worst economic crisis in modern history”, the Great Depression of the 1930s.

For their part, Diamond, a professor at the University of Chicago, and Dibwig, an academic at Washington University in St. Louis, have distinguished themselves by demonstrating “how the banking offer is the best solution” for channeling savings into investments, acting as an intermediary.

These two scholars analyzed how vulnerable these institutions are to banking panic attacks.

“If a large number of depositors go to the bank at the same time to withdraw their money, the rumor could become a self-fulfilling prophecy: there is a stampede on the bank and the bank collapses,” the committee wrote. laureate.

The committee added that this dangerous dynamic could be avoided if governments provided deposit insurance and provided banks with a lifeline by becoming lenders of last resort.

“The insights of the laureates have enhanced our ability to prevent both major crises and costly rescues,” said Tore Ellingsen, Chairman of the Committee on Reward economic sciences.

“In short, the theory says that banks can be extremely useful, but their stability is only guaranteed if they are properly regulated,” he added.

BUT”laureate false”

This award, unlike others laureatenot considered by the scientist Alfred laureate when it introduced these distinctions and was subsequently created by the Central Bank of Sweden, which is why it is sometimes referred to as “laureate false”.

But, like other awards, the medal and the amount of 10 million SEK (about $900,000) are awarded to the laureates at a ceremony on December 10th.

Of all laureateThe field of economics has the fewest number of women awarded, and since its inception in 1969, only two scholars have been honored: Elinor Ostrom in 2009 and Esther Duflo in 2019.

Last year, the award was presented to Canadian David Card, Israeli-American Joshua Angrist and Dutch-American Guido Imbens for their research that has “revolutionized empirical research” and contributed to a better understanding of labor markets. (According to AFP and EFE)