On June 21, 2023, Professor Thorsten Beck, Co-chairman of the Advisory Scientific Committee of the European Systemic Risk Board, Editor-in-Chief of the Journal of Banking and Finance, former Senior Economist of the World Bank, and Editor of the Review of Finance, was invited to the 23rd session of the Young Academic Lecture Series held by the School of Finance. The lecture was hosted by Li Xinming, Director of the Academic Development Center and Associate Professor at the School of Finance.

The lecture focused on Incomplete Supervisory Cooperation. Professor Thorsten Beck commenced by discussing the intensity of banking sector cooperation across different countries. He highlighted that current regulatory cooperation in the banking industry only covers global operations of large banking groups, leading to significant third countries externalities. Using manually collected data on regulatory cooperation, Professor Thorsten Beck examines how banking groups transfer lending activities and risks to third-country subsidiaries when cooperation agreements cover their operations in other countries. Furthermore, Professor Thorsten Beck elaborated on three mechanisms of risk transfer. He emphasized that cooperation reduces external factors that contribute to bank failures, may also result in stricter regulation and reduces information asymmetry, thereby potentially encouraging risk transfer. Professor Thorsten Beck demonstrated that cooperation leads to internal risk transfer within banking groups and is consistent with regulatory arbitrage. Increased cooperation correlates with more loans and risks in foreign subsidiaries not covered by the cooperation agreement, while loans to affected subsidiaries decline. In the concluding remarks, Professor Thorsten Beck patiently addressed questions from young scholars and students, providing an opportunity for everyone to engage in an academic feast.

This lecture is the 23rd session of the Young Academic Lecture Series held by the School of Finance. The series invites renowned finance and economics scholars from both domestic and international arenas, fostering academic exchange and offering a platform for young scholars and students to understand the forefront of international academia, grasp advanced methodologies, broaden research perspectives, and promote academic communication. This initiative is a crucial step for the School of Finance in cultivating multifaceted financial talents and is jointly organized by the Academic Development Center and the Master's Program Center of the School of Finance.