Why bankers like leverage—and what that could mean for the global financial system.
In a Reuters oped, Professor Anat Admati argues that bank dividend payouts to shareholders expose "the economy to unnecessary risks without valid justification."
A letter by Anat R. Admati and Neil M. Barofsky published by the Financial Times, March 8, 2012
After analyzing repurchase agreements by money-market funds and security lenders, these researchers believe that banks off-balance-sheet collateralization of commercial paper is more likely to have prompted the run on short-term debt financing in the recent financial crisis.
Finance professor Darrell Duffie of the Stanford Graduate School of Business proposes alternative capital requirements for banks to eliminate potential unintended consequences of financial reform.
The 2008 turmoil in world oil prices was not caused by an imbalance of supply and demand, argues Professor Kenneth Singleton of the Stanford Graduate School of Business. Instead there was an "economically and statistically significant effect of investor flows on futures prices."
When they are wrong about quarterly earnings forecasts, analysts may stubbornly stick to their erroneous views, a tendency that might contribute to market bubbles and busts, according to research coauthored by John Beshears of the Stanford Graduate School of Business.
Originally published by Thomson Reuters-GRC, June 14, 2011.
In the emerging market for peer-to-peer loans, the auction method used can make an important difference to the borrower, says Stanford Graduate School of Business economist Nicolas Lambert.
