Lasse Heje Pedersen receives ERC Starting Grant

The European Research Council (ERC) has granted Lasse Heje Pedersen, Professor from the Department of Finance at CBS an ERC Starting Grant.

The competition to receive one of the prestigious ERC Starting Grants is fierce. More than 5,000 researchers have applied, but only 536 young European top researchers have received grants from the ERC, whose aim is to promote excellent research.

Professor Lasse Heje Pedersen's project about financial frictions has received a grant from ERC. The purpose of his project is to study the possibility of controlling risk-taking and price fixing of shares and bonds. In popular terms, the project is about studying what happens when the financial markets experience sand in the machinery and how to handle the problems that arise when the markets fail to develop as intended. Naturally, the research is of great interest at the moment due to the financial crisis.

"The competitive markets generate growth when people make choices and take risks, but markets depend on adequate liquidity and well-functioning financial institutions. And what happens when sand is thrown into the machinery of the financial markets - when investors or companies are not able to borrow as much as they need because of a bank crisis? Or when the transaction costs increase and it becomes too expensive to trade? My project is about further developing the economic theories that take these frictions into account and test them empirically", says Lasse Heje Pedersen.

Earlier this year, Lasse Heje Pedersen received the Bernácer Award for being the best European economist under 40 because of his past research, which contributes to the understanding of how financial crises arise.

Earlier this year, Lasse Heje Pedersen received the Bernácer Award for being the best European economist under 40 because of his past research, which contributes to the understanding of how financial crises arise.