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Monica Billio

Monica Billio

Econometrics

Let’s talk about you: what is your background, what do you teach, and what are your research interests?
My name is Monica Billio and I teach Econometrics at Ca’ Foscari University of Venice.
I have a methodological background but I’ve always made an effort to blend the theoretical aspect of modelling with its concrete use, especially in the macroeconomic and financial field. My research interests are related to risk evaluation and management, and they require the use of non-linear modelling involving more sophisticated methods, especially for the assessment of models. Since my doctoral thesis I’ve been using techniques based on simulations, both in the traditional and Bayesian fields. From the study of volatility within financial markets and of its impact on a macroeconomic level (especially during financial crises), I extended my analysis to system vision (financial and economic) by approaching systemic risk, stability in the financial system and its correlation with the economic system. In recent years, thanks to the European projects that I’m coordinating, I’ve expanded my knowledge and vision and I am currently working on sustainable finance.

Tell us about your academic path.
I earned a degree in Economics and Business at Ca’ Foscari and then continued to study with a Diplome d'Etudes Approfondi and a PhD in Applied Mathematics at Université Paris Dauphine. I came back to Ca’ Foscari as a researcher, then as an associate professor, and finally as a full professor in 2006. I was lucky enough to coordinate the postgraduate degree in Economics and Finance for several years. I also directed the Treviso Campus and then the Department of Economics, as well as the Academic Senate.

What are you most passionate about in your field of research?
I’ve always hoped to develop research aspects that could be useful in everyday life. The best way for me to have an impact is through teaching and tutoring students.
Now that I’m focusing on sustainable finance, I appreciate the huge potential that it has in the present with an eye to the future. When we consider sustainability in finance, we broaden our horizons and take responsibility for the future. Performance and risk measures have a different reach and different values. For professors, this means contributing to research and training, which are necessary in order to understand and measure the impact of ESG and to support the training of professionals who are able to handle the complexity of sustainability and to advise investors on the distribution of resources, in order to make sustainable development goals more achievable.
In research, considering sustainability in finance means helping investors, managers and political decision-makers to deepen their knowledge of the various aspects of sustainability. We need to understand that our horizons must be wider, that we must take responsibility for the future, and that “sustainability” does not require only renouncing things and having greater costs — rather, it offers opportunities and better chances of facing and mitigating the risks which are typical of non-sustainable development.

Can you give us an example of the impact of your research?
With Ca’ Foscari I’ve been involved in the Energy Efficiency Mortgage Initiative (EEMI) for a few years. This programme is financed by the European Commission and is focused on energy efficiency. In Europe there are almost 250 million homes, 220 of which were built before 2001. These buildings are responsible for 40% of European energy consumption and 36% of its CO2 emissions.
In order to reach the European goals of CO2 reduction, a 200-million-euro investment is made every year: this means that funding must come from the private sector, as well as from the public sector.
The EEMI involves 66 banks at a European level for the development of energy efficiency mortgages, whose characteristics ensure that efficiency has a positive impact. At the same time, these mortgages have a lower credit risk, given that energy efficiency reduces costs and increases the market value of buildings.
The result is a product which promotes sustainability and has a lower risk profile. If this double benefit is accorded both to the bank and to the borrower, it can result in the use of private investments which are necessary for achieving the objectives of carbon-emission reduction which are encouraged at a European and global level.