(FEB NEWS) On Tuesday, March 11, 2025, at 01:00 PM WIB, a Guest Lecture was held at Miendrowo Hall, 4th Floor, Main Building of FEB UNAIR. This event featured Prof. Roman Matousek from Queen Mary University of London, UK, as the keynote speaker, with Ilmiawan Auwalin, Ph.D. as the moderator.
The Guest Lecture aimed to analyze possible economic recovery scenarios in the post-COVID-19 period, referring to Hyman Minsky's Financial Instability Hypothesis (FIH). The event was attended by students, lecturers, and economic practitioners eager to understand the dynamics of financial instability in the post-pandemic era.
During his presentation, Prof. Roman Matousek highlighted several key points. He discussed the misconception of financial stability, emphasizing that the belief in continuous economic growth has been proven wrong by the Global Financial Crisis (GFC) and the COVID-19 pandemic. He pointed out that monetary and fiscal policies often fail to address emerging economic issues effectively. He elaborated on Minsky’s classification of financing—Hedge Financing, Speculative Financing, and Ponzi Financing—explaining that a Minsky Moment occurs when excessive debt leads to a sudden collapse in asset values.
Prof. Matousek compared the GFC and the COVID-19 crisis, noting that while the GFC was triggered by the banking sector, the pandemic-induced crisis resulted from global supply chain disruptions. Both crises, however, exposed policymakers' unpreparedness in managing economic instability. He also addressed the effects of the pandemic on inflation and global debt, emphasizing the unprecedented rise in government deficits due to economic stimulus measures. Inflation surged as a result of increased money supply through Quantitative Easing (QE), while emerging markets demonstrated greater resilience due to more diversified investment portfolios.
Regarding banking regulations and systemic stability, he explained that the pre-pandemic environment of prolonged monetary easing allowed firms and households to become highly leveraged. This led to an increase in Non-Performing Loans (NPLs), posing potential risks to the banking sector. Looking ahead, Prof. Matousek noted the uncertainty surrounding future economic growth, inflation, and interest rate trends. While post-GFC reforms have strengthened banking sector resilience, they may not be sufficient to withstand future financial crises. He warned that a new Minsky Moment could emerge due to unsustainable corporate and household debt.
The lecture concluded with an interactive Q&A session, allowing participants to engage in discussions with the speaker. The event successfully provided valuable insights into the challenges of post-pandemic economic recovery and global financial instability. The session officially ended at 3:30 PM.
