But this research must be independent and o quality

A super icial analysis o the inancial crisis led to attribute responsibility, at least in part, to the excesses o inancial inno ation, including abuse o mathematics and modelling. It is the image o the sorcerer's apprentice banker, highly paid by bonuses to load its customers (and his employer) o toxic substances disguised as in estments without risk with ultra-sophistiqués models. I research in inance led to de elop such products, not only it is unnecessary, but it would be dangerous...

This image is appealing but mistaken: I we look at more closely the per ormance o di erent banks throughout the crisis, by comparing also acti e banks in the markets, there is a strong correlation between the le el o their losses and the relati e weight, in the Bank, teams o control and analysis o the risks rom operational teamsteams markets and teams credit. Speci ic examples exist, that pro essionals know: alerts raised by the control o the risks had been ignored by the directions on the basis o reassuring words o the "experts" business. "Operational" type as the exceedance o the commitment authorization alerts, but also alerts more complex techniques to model risk or liquidity risk taken by the operators on behal o the Bank.

In the latter case, which was by ar the most expensi e or banks, it's ery technical issues, or example the e ect o e ents ery little probable method o taking into account correlations, or e en the mis en cause o methods o calculation o risk widespread at one point despite their weaknesses. Regularly, the direction o the Bank must decide whether to wai e operations ery pro itable to a oid risks: these risks seem theoretical be ore occur, and they are submitted to the Directorate-General by less prestigious than the operational internal teams that o er these operations.

It seems that, at least in some banks, the good decision still was taken more than bad, and the right choice is translated in the results by the economy o se eral billion euros o losses.

A irst conclusion must be: the main cause o the losses o banks is the relati e weakness o the control o risks, weakness o political irst teams in the balances o power in the Bank. But sometimes also weak technical and insu icient knowledge o academic research to support risk analysis.

Indeed, just look at some o the papers published or ten years by our best researchers to ind answers to a number o the risk re ealed by the crisis. Some o these risks were identi ied, whether it's o course risk markets analyzed by mathematicians and economists, but also operational risk management and remuneration structures risk studied in management science.

Research in inance, including in the neighbouring areas o the economy, accounting and management can and should play an important role in ensuring the stability o each inancial institution and the entire system. But this research must be independent and o quality.

No one disputes that the other sectors o the economy, industry, energy, building, need to rely on scienti ic, theoretical and experimental bases to ensure the sa ety o their products. inance has the same needs, with the ad antage to appeal to intellectuals and computer means relati ely lightweight and not hea y physical in estments. E en taking into account this di erence, one is struck by the weakness o the resources de oted to research in inance issues. Two comparisons: total unding currently obtained by the pole o competiti eness inance Inno ation or academic research is o the order o EUR 5 million per year. It is already remarkable rom the quasi-zéro o the pre ious situation. But it is only the equi alent o two hours o annual pro its o rench banks in 2007, be ore the crisis. It is also two dix-millièmes o the amount o the posted losses since...

An independent and credible academic research is essential. Independent, i.e. with unding combining public unding and sponsorship, as well as applied research already done under contract pri ate market operators. Credible research because that judged by peers, not on the only arithmetic test o the number o publications, but on the quality o the work and results. It must be multidisciplinary, the crisis has shown, combining mathematical case, economics, humanities and social sciences and business management.

We ha e the human and technical resources in rance, pro ided that gi e them the inancial means. The experience o recent years has learned to the best o our research teams to work together and communicate with pro essionals without them being subordinate. This is the case or the two weeks o research chairs unded through the oundation Europlace o inance and the oundation o the risk, each being ollowed by scienti ic boards o oundations and the Institut Louis Bachelier. Instruments and structures, de elopment and ollow-up o this work ha e been de eloped in recent years. They allow to ensure the e ecti eness o the public and pri ate in estment in this sector. irst issue is the uture o the inancial sector, its security, competiti eness and de elopment. But it is also because o the importance o good health o the inancial sector to the rest o the economy.