“Financial Markets and Frictions” Successfully Enters Second DFG Funding Period (FOR 5230)
The German Research Foundation (DFG) has approved the research group FOR 5230 Financial Markets and Frictions – An Intermediary-Based Asset Pricing Approach for a second funding period through 2029 following a successful evaluation. As a result, the transregional collaborative project, which has been making key contributions to modern financial market research since 2022, will receive funding for an additional four years with a total volume of approximately €4 million. Of this amount, €1.35 million will be allocated to participants at Goethe University Frankfurt.
The research group brings together leading financial market researchers from Karlsruhe, Frankfurt, Hanover, Münster, Stuttgart, Tübingen, and Vienna and examines price formation in financial markets from the perspective of financial intermediaries. The central focus is on how frictions, incentive structures, and constraints faced by intermediary actors—such as banks, funds, or insurance companies—affect asset prices, risks, and monetary policy transmission mechanisms.
Department 02 Economics at Goethe University Frankfurt represents an integral part of this success, contributing three project leaders as well as the deputy spokesperson of the research group:
The teams led by Professors Christian Schlag (Deputy Spokesperson), Holger Kraft, Maik Schmeling, and Rüdiger Weber investigate complementary research questions within FOR 5230 concerning the role of financial intermediaries in the transmission of monetary policy impulses, the emergence of asset price movements, and the transfer of risk in financial markets. Through empirical and theoretical work, they contribute to systematically extending classical asset pricing approaches to incorporate intermediaries, thereby developing a more realistic understanding of modern financial markets.
About the Research Group FOR 5230
The research group FOR 5230 was established in 2022 to more firmly anchor the role of financial intermediaries in asset pricing research. It is funded by the German Research Foundation (DFG) and is one of the central collaborative research initiatives in the field of financial market research.
Further information: Link
Photo: Markus Breig
