Elena Carletti has been awarded an Advanced Grant by the European Research Council (ERC) for her project INFINITY (”The Origins of Financial Fragility”) to study the causes and consequences of banking crises. Her research will address why these crises, often triggered by sudden depositor runs and preceded by deregulation, remain a persistent threat. The 2023 U.S. bank failures serve as a recent example of these dynamics. One part of the project will develop a new theoretical framework to explain banks’ reliance on demandable debt despite its risks. Another will investigate how banks shape policy and influence deregulation. A third strand will explore how supervisory intensity and the personal style of supervisors affect bank behavior. Together, these efforts will shed light on the roots of financial fragility and the political and institutional forces behind it, ultimately aiming to strengthen financial stability in Europe and beyond. 

ERC Advanced Grants are prestigious European Research Council awards that provide substantial funding to established, leading researchers with a proven track record to pursue ambitious, high-risk, high-reward projects.