Where do financial crises come from? How can they be resolved? What is regulation for? Is it necessary? These and other topics were discussed in another lecture within the Engineering, Decision and Public Policies curricular unit, led by Inês Drumond, vice-president of the Portuguese Securities Market Commission (CMVM), on 27 November.
The speaker analysed the anatomy of the financial sector, explaining that it is comprised of banks, the capital market—regulated by the CMVM—and insurance and pension funds. She noted that due to the risks involved, the financial sector is “extremely regulated” and must comply with “very strict” rules.
In the recent past, Inês Drumond highlighted two points of interest that she approached as case studies: the 2007/2008 crisis, which began in the US and was due to ‘obvious flaws in the regulation of the banking sector’, and the sovereign debt crisis, related to the markets’ concerns about the sustainability of Greek public debt, which then spread to other countries. ‘The financial sector is very much based on trust – hence the importance of regulation to ensure it’, she said. The financial supervision and regulation mechanisms created after these crises were also presented, in contrast to previous ones.
Following a student’s question, Inês Drumond distinguished the types of crypto-assets and explained that a considerable fraction of these will be regulated from January 2025. This question was followed by many others posed by students in the audience, which allowed for exploring different aspects of the financial sector.
This curricular unit is part of the ‘Humanities, Arts and Social Sciences’, and aims to develop students’ critical thinking about how engineering and decision-support systems—including risk assessment, data analysis, decision analysis, statistical analysis, optimisation, participatory modelling, communication, and scenario planning—can improve political analysis and decision-making in a real context.
This lecture was preceded by sessions with Ana Fontoura Gouveia, former Secretary of State for Energy and Climate, Adalberto Campos Fernandes, former Minister of Health, António Leitão Amaro, current Minister of the Presidency and Alexandra Leitão, former Minister for Modernisation of the State and Public Administration.
