Two major research projects into global liquidity risk and Asian financial integration have been commissioned by the Centre for International Finance and Regulation (CIFR).
Both projects have been commissioned in a bid to ensure better informed debate and policy formulation process in Australia and internationally.
CIFR chief executive Ros Grady said that the Institute of Global Finance (IGF) had been commissioned to undertake the projects, which are timely and important.
“The research on regional financial integration and stability is extremely timely with the recent release of the current government’s Asian Century white paper, and having regard to the opportunities for Australian financial institutions in the region’s markets,” Mr Grady said.
“We are also very pleased to be able to fund research on the little researched, but critical, area of liquidity risk.”
The first project, on global liquidity risk and financial innovation, will consider the role of institutional investors during the global financial crisis.
It will particularly examine the effect of liquidity risks on stock returns and financial stability, and look at whether the heterogeneity of institutional investors matters in liquidity shock transmission, CIFR said.
CIFR added that there would also be analysis of the effects of financial innovation on liquidity risk.
Meanwhile, the other project will consider the implications for Asia of the financial sector policy reforms initiated by the G20, the Bank for International Settlements and the Basel Committee.
CIFR said there would be a particular focus on Australia’s key bilateral financial relationships in the region, particularly China, India and ASEAN countries.
Other areas of focus will include issues relevant to financial market stability, foreign exchange regimes, foreign exchange movements, systemic risks and liquidity risks.
Consideration will also be given to the role of non-interest income bank activities, while there will also be analysis on the factors that contribute to close regional financial integration and stability.
Both three-year projects will be led by Professor Fariborz Moshirian, director of the Institute of Global Finance (IGF) at the University of New South Wales.
They will also involve the input of some of the international collaborators of the IGF, including Nobel Laureate, Professor Robert F. Engle at New York University (NYU).
Professor Moshirian said, “The global nature and interlinking of capital markets demand a global research effort and collaboration. The IGF and some of its international collaborators from the NYU and UCLA are happy to work on these two commissioned projects for the CIFR as these research topics are timely and important for regulators, market participants, government and academics.”
