Social Sciences and Humanities Research Council
May 30, 2012
Thorsten Koeppl, professor of Economics and RBC Fellow at Queen’s University, is researching how clearing houses work to improve the infrastructure of financial markets. His research is informing policy decisions in institutions such as the Bank of Canada and helping to bridge the gap between purely theoretical academic research and its application in the real world.
My name is Thorsten Koeppl. I’m an associate professor at Queen’s University and also RBC Fellow, and I’m a professor in the Department of Economics.
In the past, SSHRC has funded one grant for me and that concerned how to improve the infrastructure in financial markets. My research especially focused on one cornerstone of financial markets, which is clearing houses, and my research concerned the function that clearing houses take on as so-called “central counterparties”. So what are these institutions for? First of all, they kind of concentrate risk in financial markets, redistribute it across people, and then, through this redistribution, lower it. And the amazing part about SSHRC funding this project is that it was actually funded before the financial crisis in 2007 through 2009. And that’s kind of surprising because not many people were interested in this topic and the financial crisis brought it to the forefront of a lot of issues that we’re facing right now in revamping the regulation of financial markets.
SSHRC has helped my research by providing funding for PhD students and that’s very important because it can get PhD students interested in this topic. And that’s very helpful because through that I can educate future experts in this field and then, basically, try future policy decisions in institutions such as the Bank of Canada or OSFI again. There’s an additional way in which SSHRC has helped me with funding because it facilitated the dissemination of my research results, not only in academic conferences but very much so with financial market participants and policy-makers. And that’s very important because that bridges the gap from purely theoretical academic research and the application in the real world.