Isabel Schnabel What Is the Relationship Between Asset Price Bubbles and Systemic Risk at Bank Level?

Isabel Schnabel is Professor of Financial Economics at the University of Bonn. Appointed to the Executive Board of the European Central Bank in 2019, Schnabel provides expert advice to several other national and international governmental bodies. A member since 2014 of the German Council of Economic Experts, she also chairs the Advisory Board to Germany’s Federal Financial Supervisory Authority (since 2016). Schnabel’s main research interests include banking stability and regulation, international finance and economic history. She received the German Economic Association’s prestigious Gustav Stolper Award in 2018.

Area of Research


since 2015

Professor of Financial Economics

University of Bonn (Rheinische Friedrich-Wilhelms-Universität Bonn) (more details)

Department of Economics

since 2019


Deutsch-Französischer Rat der Wirtschaftsexperten

since 2019


University of Bonn (Rheinische Friedrich-Wilhelms-Universität Bonn) (more details)

Cluster of Excellence 2126 “ECONtribute – Markets & Public Policy"

since 2017

Deputy Chair of Scientific Advisory Board

Deutsche Bundesbank, Research Data and Service Centre (RDSC)

since 2016

Chair of Advisory Board

Bundesanstalt für Finanzdienstleistungsaufsicht


Professor of Financial Economics

Johannes Gutenberg University Mainz (Johannes Gutenberg-Universität Mainz)

Faculty of Law, Management and Economics


Senior Research Fellow (Postdoc)

Max Planck Society

Max Planck Institute for Research on Collective Goods, Bonn


Visiting Postdoctoral Fellow

Harvard University

Department of Economics


Research Assistant

University of Mannheim (Universität Mannheim)

Department of Economics

since 2015

Research Fellow

Centre for Economic Policy Research (CEPR)


Dissertation (Dr. rer. pol.)

University of Mannheim (Universität Mannheim)

“Macroeconomic Risks and Financial Crises - A Historical Perspective,“ (summa cum laude)


Doctoral Studies

University of Mannheim (Universität Mannheim)

Graduate Program "Allocation on financial markets" at the Department of Economics



University of California, Berkeley

Department of Economics


Diploma in Economics

University of Mannheim (Universität Mannheim)

Department of Economics



Internationaler Währungsfonds (IMF)

- Perspektiven der Wirtschaftspolitik (since 2019)

- Financial History Review (since 2009)

- Review of Economics (2012 - 2017)

- North Rhine-Westphalian Academy of Sciences, Humanities and the Arts (since 2019)

- IZA – Institute of Labor Economics and Deutsche-Post Stiftung (since 2019)

- Berlin-Brandenburg Academy of Sciences and Humanities (since 2018)

- Reinhard Selten Institute (since 2017)

- Advisory Scientific Committee of the European Systemic Risk Board (since 2015)


- Stolper Prize - Verein für Socialpolitik (2018)

- Vordenkerpreis (2018)

- Wirtschaftspolitischer Club Deutschland (2017)

- Deutscher Mittelstandspreis, Category “Society” (2015)

- Postbank Finance Award (2011)


- TMR-Scholarship (European Commission, 2001)

- Frankfurter Institut für Risikomanagement und Regulierung (FIRM): “Asset Price Bubbles and Systemic Risk”(cooperation partner: Markus Brunnermeier, Princeton University, 2015-2017)

- DFG Priority Program 1578 “Financial Market Imperfections and Macroeconomic Performance”: Financial contagion through market prices – Theory and evidence (with Hendrik Hakenes, University of Bonn, 2012-2017)

© University of Bonn

University of Bonn (Rheinische Friedrich-Wilhelms-Universität Bonn)

Bonn is one of the large universities in Germany, with around 36,000 students, 550 professors, 6,500 other staff staff. It offers a wide disciplinary spectrum comprising some 200 different degree programmes, from Agricultural Science to Tibetan Studies. This diversity is what characterizes Bonn as a full-range university with a strong international orientation. In many international university rankings Bonn is placed among the 100 best universities in the world.Its academic and research profile features internationally renowned specializations in the fields of Mathematics, Physics/Astronomy, Economics, Chemistry, Pharma Research, Biosciences, Genetic Medicine, Neurosciences and Philosophy/Ethics. Other disciplines, such as Geography and Law, are of outstanding importance within the German research scene.

The Rheinische Friedrich-Wilhelms-Universität Bonn is rooted in a long tradition going back almost 200 years. It was founded in 1818 by Friedrich-Wilhelm III, the Prussian king whose name it bears. Imbued with the spirit of Wilhelm von Humboldt, the university quickly joined the circle of Germany's most distinguished universities and became a major pole of attraction for leading scholars as well as students.The list of famous professors ranges from the astronomer Friedrich Wilhelm Argelander (1799-1875), through the chemist August Kekulé von Stradonitz (1829–1896) and political economist Josef Schumpeter (1883–1950) to the philologist Ernst Robert Curtius (1886–1956) and the theologists Karl Barth (1886–1968) and Joseph Ratzinger (born 1927), now Pope Benedict XVI. Bonn's best-known students include Heinrich Heine, Karl Marx, Friedrich Nietzsche, and Konrad Adenauer.

The university is proud of a long list of award-winning scientists and scholars, with about twenty Leibniz Prize winners and around thirty ERC grantees. In the last three decades two professors have received the Nobel Prize: Wolfgang Paul (for Physics, 1989) and Reinhard Selten (for Economics, 1994). (Source: University of Bonn)


The Collaborative Research Center (CRC) TR 224 – EPoS

The Collaborative Research Center (CRC) TR 224 – EPoS is a cooperation between the University of Bonn and the University of Mannheim. Funded by the German Research Foundation (DFG), it aims to analyze and provide policy proposals that address three key societal challenges: how to promote equality of opportunity; how to regulate markets in light of the internationalization and digitalization of economic activity; and how to safeguard the stability of the financial system.


Why do some financial bubbles lead to financial crises while others do not? In this video, ISABEL SCHNABEL examines the role that individual financial institutions play in the relationship between asset price bubbles and systemic risk. Employing the BSADF test to identify asset bubbles and ΔCoVaR (the Delta Conditional Value-at-Risk) to measure systemic risk at the individual bank level, Schnabel highlights a clear relationship between bank size and systemic risk. Suggesting that regulatory intervention might be better directed at institutions bearing higher risks than at the system in its entirety, this research makes an important contribution both to our understanding of financial crises and our ability to prevent them going forward.

LT Video Publication DOI:

Asset Price Bubbles and Systemic Risk

  • Markus K. Brunnermeier, Simon C. Rother and Isabel Schnabel
  • Published in 2019
Markus K. Brunnermeier, Simon C. Rother and Isabel Schnabel. "Asset Price Bubbles and Systemic Risk." Unpublished. 2019. doi:10.3386/w25775.