The 12th CEPR/European Summer Institute Annual Conference will take place on 25/26 September 2008 in Basel and will be co-organised with, and hosted by, the Bank for International Settlements.

The topic will be 'The Evolving Financial System and the Transmission Mechanism of Monetary Policy'. The structure of the financial system has changed considerably in recent years in at least three ways.
First, financial markets and institutions have become more globalised, thus strengthening the international transmission of shocks.
Second, business models of financial institutions have shifted from originate-and-hold to originate-and-distribute strategies. While the recent turmoil in financial markets may have slowed the growth in the securitisation of financial claims, at this stage it is too early to say whether the trend has been reversed.
Third, regulatory and accounting frameworks have changed substantially. Banking regulation has been shifting from a framework of simple rules to a more model-based approach based on risk management principles. Similarly, historical cost accounting has been giving way to fair value accounting (mark-to-market or mark-to-model).

Assessing the implications of these trends for monetary policy in general, and the transmission mechanism in particular, is not straightforward. For example, to what degree do the existing models used for monetary policy have to be adapted in the light of these changes? How are the individual channels of monetary policy transmission affected, and how is this reflected in their balance? To what extent should monetary policy strategies be adjusted to respond to such changes?

In addition to the submissions selected from a call for papers, the programme will include policy lectures by senior central bankers, papers by reputed academics and a high-level panel.

One part of the conference will be reserved for central bank researchers of member countries of the European Union and the EU candidate countries.