Financial Services
STANFORD GRADUATE SCHOOL OF BUSINESS—Is the fact that Moody's Investors Service was still touting WorldCom debt as "investment grade" just four days before the firm went bankrupt proof that the bond-rating system is broken? Not at all, argue the authors of a new research study, who say that "...
(View the letter as it appeared in the Financial Times)
November 9, 2010
The Basel III bank-regulation proposals that G20 leaders will discuss fail to eliminate key structural flaws in the current system. Banks’ high leverage, and the resulting fragility and systemic risk, contributed to the near...
STANFORD GRADUATE SCHOOL OF BUSINESS—A plan by global financial regulators to fix the mess created by the misuse of credit default swaps is flawed, says Darrell Duffie, professor of finance at the Stanford Graduate School of Business.
In a preliminary research paper, Duffie, and GSB doctoral...
STANFORD GRADUATE SCHOOL OF BUSINESS - Our search to understand what makes humans happy (or happier) goes back centuries. As does our enduring belief that if we just do the right thing, happiness will follow - that additional happiness will be doled out to us because we earned it, not due to the...
(View the text from the online version of Financial Times)
This appeared in the online Financial Times on Jan. 28, 2011 under the title "Dividend Levels Truly Reflect the Health of Banks' Capital"
Anat Admati
George G.C. Parker Professor of Finance and Economics
Graduate School of Business...
February 15, 2011
Sir,
Mr. Isaac ("Banks should be allowed to pay out dividends", February 9) supports higher capital requirements, but argues that preventing profitable banks from paying "reasonable" dividends impedes bank lending and economic growth. We disagree.
Paying dividends...
STANFORD GRADUATE SCHOOL OF BUSINESS—They tend to hit the headlines for the wrong reasons.
The practice of short-selling made news after the attacks on the World Trade Center and the Pentagon. Terrorist groups were suspected of profiting from their foreknowledge by taking short positions in...
STANFORD GRADUATE SCHOOL OF BUSINESS—Overconfident CEOs who overestimate their ability to generate value within their company systematically make distorted decisions about when, how, and how much to invest in new projects according to research.
Ulrike Malmendier, assistant professor of finance at...
STANFORD GRADUATE SCHOOL OF BUSINESS—More companies than ever before are issuing convertible bonds as a way to raise capital. According to conventional wisdom, these hybrids—part bond, part stock—attract investors because they promise the security of a bond, plus the option to convert to equity...
STANFORD GRADUATE SCHOOL OF BUSINESS—As more and more people are putting their money into the care of professionals, it's time to ask if the people investing your money are properly motivated—that is, if they are given incentives to make the right decisions when they construct portfolios composed...