...Keep running funds, Extend them into other countries, Focus as much on behavioral as they are Jp morgan pioneer in behavioral investing Began to focus in us market On investment side, Chris complin, cio for behavioral finance, had all give new products in the top 20% of their lipper categories On business of asset management unit, Richard chambers, head of us and eoropean marketing, had given investor psychology a central in the branding of the new funds By Q3 2006 total assets under management was 20 billion from 100 million in 1Q 2003 Jp mogran broken down to: Private bank, focusing on wealth management for the most affluent clients End of 2006, 1.15 trillion of assets under supervision, and 847 billion under management Private bank built portfolios, asset management delivered individual building blocks Behavioral Finance JP morgans benahviroal finance began in 1992 in london 2/3 of 76 billion in behavioral finance products was in non-us stocks. First fund, premier equity growth, formed in 1992 by Andrew spencer Beat benchmark 9 of 10 years Complin took over for spener Cheap stocks outperform expensve tstocks Best recent performers outperformed the worst recent performers JP MORGRAN EMPHASIZED OVERCONFIDENCE AND LOSS AVERSION Believed both were pervasive and persistent in explaining the existence of value and momentum anomalies Overconfidence - “80% of drivers bliece they are better than aveaege) Jpm approach forces our funds to systematically...
Words: 500 - Pages: 2
...In the spring of 2008, the world was hit by the worst Financial Crisis since World War 2. The crisis began during the Reagan administration and concluded a couple decades later with the collapse of the housing bubble. Behavioral Finance defines the term “bubble” as an event occurring before a market crash due to overvalued market prices (Ricciardi 2000). The housing bubble, which grew alongside the stock bubble in the mid 90’s, eventually burst, and a financial meltdown ensued. Initially, one bank was crippled and two of the worlds’ largest mortgage investors followed, plummeting our country deeper into debt. In this paper, I will discuss the days leading up to the housing bubble, causes of the bubble, the grim days after the bubble burst and the solutions which quelled the global crisis. The crisis began during the Reagan administration when free market believers, such as Alan Greenspan, were in power. As chairman of the Federal Reserve, Greenspan believed that any problem in the market would work itself out, and paid little attention to regulations and fraud. After Clinton was elected to office, Greenspan would team up with Robert Rubin, the assistant to Clinton on economic policy and Larry Summers, Rubins top deputy. While power shifted in New York, Washington started to look into over the counter derivatives. Washington would hire Brooksley Born, a long time securities lawyer with ties to the Clintons, of the Commodities Futures Trading Commission to step in and look over...
Words: 1345 - Pages: 6
...National Chengchi University Department of Finance ETP Graduate Investments Fall 2010 Case Discussion Questions Instructor: Professor Edward H. Chow 周行一 Case study: financial bubble Case: Trouble with a bubble (9-808-067) 1. Why did Irving Fisher believe that stock prices had reached a permanently high plateau? 2. Why did the stock market crash in 1929? 3. Why did influential individuals like Fisher, Keynes and Rockefeller believe that the downturn would only be temporary? Case study: investment banking business and global financial crisis Case: Investment banking in 2008 (A): Rise and fall of the Bear (KEL378) 1. What role did Bear’s culture play in its positioning vis-à-vis its competitors, and what role might that culture have played in its demise? 2. 2. How did Bear’s potential collapse differ from that of LTCM in the eyes of the Federal Reserve? 3. What would Bear have done differently to avoid its fate? a. - In the early 2000s? b. - During the summer of 2007? c. - During the week of March 10, 2008? 4. Who stood to benefit from Bear’s implosion? 5. Is market perception of liquidity more important for an investment bank than it is for an traditional manufacturing or distribution business? If so, why? 6. How could Bear have addressed perceptions of its liquidity? Could it have stopped the run on the bank, and if so, how? 7. Did Bear’s failure undermine the viability of so called “pure-play” investment banks? 8. What role should the Fed...
Words: 1896 - Pages: 8
...National Chengchi University Department of Finance ETP Graduate Investments Fall 2014 Case Discussion Questions Instructor: Professor Edward H. Chow 周行一 Case study: financial bubble Case: Trouble with a bubble (9-808-067) 1. Why did Irving Fisher believe that stock prices had reached a permanently high plateau? 2. Why did the stock market crash in 1929? 3. Why did influential individuals like Fisher, Keynes and Rockefeller believe that the downturn would only be temporary? Case study: investment banking business and global financial crisis Case: Investment banking in 2008 (A): Rise and fall of the Bear (KEL378) 1. What role did Bear’s culture play in its positioning vis-à-vis its competitors, and what role might that culture have played in its demise? 2. How did Bear’s potential collapse differ from that of LTCM in the eyes of the Federal Reserve? 3. What would Bear have done differently to avoid its fate? A. - In the early 2000s? B. - During the summer of 2007? C. - During the week of March 10, 2008? 4. Who stood to benefit from Bear’s implosion? 5. Is market perception of liquidity more important for an investment bank than it is for an traditional manufacturing or distribution business? If so, why? 6. How could Bear have addressed perceptions of its liquidity? Could it have stopped the run on the bank, and if so, how? 7. Did Bear’s failure undermine the viability of so called “pure-play” investment banks? 8. What role should the Fed...
Words: 1913 - Pages: 8
...9-707-446 REV: JANUARY 28, 2008 JOHN R. WELLS Providian Financial Corporation Introduction On October 3, 2005, Washington Mutual acquired Providian Financial Corporation, the ninthlargest credit card issuer in the U.S., for $6.5 billion. At the time, Providian had approximately 10 million customer relationships and a balance of $18.6 billion. For some observers, the transaction was merely the end of another chapter in the history of the fast consolidating credit card market.1 For Providian CEO Joseph Saunders it was vindication of four years’ hard work in turning around a company that many thought was close to bankruptcy. Saunders reflected, “I actually think that we took over a company that many people—maybe even most people—thought was going to fail”; he added, “Providian is no longer just a turnaround story, we are a success story.”2 Company History Providian began as Commonwealth Insurance, which was founded in 1904. The company survived the depression of the 1930s and, in the late 1960s, formed Capital Holdings to acquire other insurance enterprises and financial services companies. In the 1980s Capital Holdings started targeting low- and middle-income people when it established itself in Kroger grocery stores and in certain Bank of America branches. The 1984 acquisition of First Deposit Corporation from Parker Pen marked the beginning of the compnay’s focus on credit cards, which “later became [its] primary profit-making operation.”3 In the 1990s, Capital Holdings...
Words: 6912 - Pages: 28
...Risk Management & Insurance Exam 1 By Gursharan Deep Singh T.Engel MBA 546 Oct11 2013 Q1-We have studies how firms evaluate various risks and risk management techniques. Identify the risks and describe the techniques? Answer- Risk has been defined as uncertainty concerning the occurrence of loss. Various types of risk faced by firms are as follow: 1.property risks: The risk of damage to business property due to natural disasters like flood, earthquake. Tornadoes, fires and other perils. 2.Liability risks: In this company is sued for numerous number of reasons such as injuries to customer, discrimination against employees. 3.pure and speculative risk: pure risk is defined as situation in which there are only the possibilities of loss or no loss. Speculative is the one in which there is either profit or loss is possible. 4.stratergic risk: A possible source of loss that might arise from the pursuit of an unsuccessful business plan. For example, strategic risk might arise from making poor business decisions, from the substandard execution of decisions, from inadequate resource allocation, or from a failure to respond well to changes in the business environment. 5.operational risk: Probability of loss occurring from the internal inadequacies of a firm or a breakdown in its controls, operations, or procedures. 6.financial risk: The probability of loss inherent in financing methods which may impair the ability to provide adequate return. 7. Transaction:...
Words: 2314 - Pages: 10
...The Efforts in Urban Design to Attain a Functional Environment MAUD Liu Yi C1324401 Key Words: urban design; elements; function; pattern; development; functional environment 1. Introduction In defining urban design, many designers and planners have referred to the elements of urban design and limitations of geometry and technologies. There are many streams of thinking about urban design today, and urban design pulls together many lines of thought (Scott Brown 1982, 1990). As Jon Lang (1994, p. 211) notes: … urban design is to create the public realms of human settlements that afford the fulfillment of human needs. All human settlements consist of behavior settings, while behavior settings consist of a standing (or recurring) pattern of behavior and a milieu (a physical pattern). In fact, urban designers can be thought of as pattern maker. In urban design most issues focus on the tradeoffs between the achievement of competing goals, between human needs and functions provided by the physical environment. Hence, urban design is more likely to be seen as a problem-solving approach from the perspective of the users in some specific environment. These approaches are committed to obtaining a higher quality of life in human settlements. They could be achieved from the developments in both substantive and procedural knowledge that have resulted from the empirical research of the past three decades. There has been much questioning about how best the effort...
Words: 3268 - Pages: 14
...CFA Institute Fundamental Indexation Author(s): Robert D. Arnott, Jason Hsu and Philip Moore Source: Financial Analysts Journal, Vol. 61, No. 2 (Mar. - Apr., 2005), pp. 83-99 Published by: CFA Institute Stable URL: http://www.jstor.org/stable/4480658 . Accessed: 24/02/2014 01:32 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. . CFA Institute is collaborating with JSTOR to digitize, preserve and extend access to Financial Analysts Journal. http://www.jstor.org This content downloaded from 134.117.10.200 on Mon, 24 Feb 2014 01:32:09 AM All use subject to JSTOR Terms and Conditions FinancialAnalysts Journal Volume 61 . Number 2 ?2005, CFAInstitute X Fundamental Indexation Robert D. Arnott,Jason Hsu, and PhilipMoore to A trillion-dollar industryis basedon investingin or benchmarking capitalization-weighted the This literature indexes, eventhough thefinance rejects mean-variance efficiency suchindexes. of measures whether stockmarket indexesbasedon an arrayof cap-indifferent study investigates of than...
Words: 12714 - Pages: 51
...The media’s watching Vault! Here’s a sampling of our coverage. “For those hoping to climb the ladder of success, [Vault’s] insights are priceless.” – Money magazine “The best place on the Web to prepare for a job search.” – Fortune “[Vault guides] make for excellent starting points for job hunters and should be purchased by academic libraries for their career sections [and] university career centers.” – Library Journal “The granddaddy of worker sites.” – U.S. News & World Report “A killer app.” – The New York Times One of Forbes’ 33 “Favorite Sites.” – Forbes “To get the unvarnished scoop, check out Vault.” – SmartMoney Magazine “Vault has a wealth of information about major employers and job searching strategies as well as comments from workers about their experiences at specific companies.” – The Washington Post “A key reference for those who want to know what it takes to get hired by a law firm and what to expect once they get there.” – New York Law Journal “Vault [provides] the skinny on working conditions at all kinds of companies from current and former employees.” – USA Today Customized for: Mian Badr (mian.iftikhar@studbocconi.it) Customized for: Mian Badr (mian.iftikhar@studbocconi.it) VAULT CAREER GUIDE TO MIDDLE MARKET INVESTMENT BANKING JOE BEL BRUNO AND THE STAFF OF VAULT Customized for: Mian Badr (mian.iftikhar@studbocconi.it) Customized for: Mian Badr (mian.iftikhar@studbocconi.it) Copyright © 2009 by Vault.com, Inc. All rights reserved....
Words: 71250 - Pages: 285
...THE SUBPRIME CREDIT CRISIS AND CONTAGION IN FINANCIAL MARKETS Francis A. Longstaff∗ Abstract. We conduct an empirical investigation into the pricing of subprime assetbacked CDOs and the resulting contagion effects on other markets. Using data for the ABX indexes of subprime CDO prices, we find strong evidence of contagion effects. In particular, we find that contagion effects spread first from lower-rated ABX indexes to higher-rated ABX indexes, and then from the subprime markets to the Treasury bond and stock markets. ABX index returns forecast stock and Treasury bond returns as much as three weeks ahead during the crisis. Furthermore, ABX index shocks are significantly related to contractions in the size of the short-term credit markets and increases in the trading activity of financial stocks over the next several weeks. These results provide support for the hypothesis that financial contagion was spread through liquidity and risk-premium channels. Current version: August 2008. UCLA Anderson School and NBER. I am very grateful for helpful discussions with Joshua Anderson, Vineer Bhansali, Bruce Carlin, Richard Clarida, Rajna Gibson, Rob- ert Gingrich, Hanno Lustig, Alfred Murata, Steve Schulist, and Jiang Wang, and for the comments of seminar participants at New York University, Pimco, and UCLA. All errors are my responsibility. ∗ 1. INTRODUCTION During the past year, financial markets have suffered catastrophic losses from the ongoing credit crisis. This crisis was initially...
Words: 10924 - Pages: 44
...Investment Banking Giuliano Iannotta Investment Banking A Guide to Underwriting and Advisory Services Professor Giuliano Iannotta Department of Finance ` Universita Bocconi via Roentgen 1 20136 Milano Italy giuliano.iannotta@unibocconi.it ISBN: 978-3-540-93764-7 e-ISBN: 978-3-540-93765-4 DOI 10.1007/978-3-540-93765-4 Springer Heidelberg Dordrecht London New York Library of Congress Control Number: 2009943831 # Springer-Verlag Berlin Heidelberg 2010 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: WMXDesign GmbH, Heidelberg, Germany Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com) To my family ...
Words: 86170 - Pages: 345
...Equity Investments: Valuation, and Managing Investment Portfolios: A Dynamic Process. Ackerman, Carl, Richard McEnally, and David Ravenscraft. 1999. “The Performance of Hedge Funds: Risk, Return, and Incentives.” Journal of Finance. Vol. 54, No. 3: 833–874. ACLI Survey. 2003. The American Council of Life Insurers. Agarwal, Vikas and Narayan Naik. 2000. “Performance Evaluation of Hedge Funds with OptionBased and Buy-and-Hold Strategies.” Working Paper, London Business School. Ali, Paul Usman and Martin Gold. 2002. “An Appraisal of Socially Responsible Investments and Implications for Trustees and Other Investment Fiduciaries.” Working Paper, University of Melbourne. Almgren, Robert and Neil Chriss. 2000/2001. “Optimal Execution of Portfolio Transactions.” Journal of Risk. Vol. 3: 5–39. Altman, Edward I. 1968. “Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy.” Journal of Finance. Vol. 23: 589–699. Altman, Edward I. and Vellore M. Kishore. 1996. “Almost Everything You Wanted to Know about Recoveries on Defaulted Bonds.” Financial Analysts Journal. Vol. 52, No. 6: 57−63. Altman, Edward I., R. Haldeman, and P. Narayanan. 1977. “Zeta Analysis: A New Model to Identify Bankruptcy Risk of Corporations.” Journal of Banking and Finance. Vol. 1: 29−54. Ambachtsheer, Keith, Ronald Capelle, and Tom Scheibelhut. 1998. “Improving Pension Fund Performance.” Financial Analysts Journal. Vol. 54, No. 6: 15–21. Ambachtsheer, Keith. 1986. Pension Funds and the Bottom...
Words: 12603 - Pages: 51
...Financial Crisis By Hisham Al Rawashdeh Under supervision of PhD Muna Al Muallah Financial Management Petra University Jan 2016 Table of contents:- • Definition • Types of Financial crisis • Financial Crisis Causes • Theories • Financial Crisis of 2008 • Implications of Financial Crisis of 2008 on the emerging market. • Next Financial Crisis. • References Definition The term financial crisis is applied broadly to a variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults. Financial crises directly result in a loss of paper wealth but do not necessarily result in changes in the real economy. Financial crisis and Economic Crisis • Financial Crisis usually occurs in specific sectors, unlike the economic crisis which affect the entire economy. • If left unchecked, the financial crisis implications can lead to an economic crisis. In early 2008, many felt that this financial crisis would be limited to the banking sector and the housing market. However, the shortage of credit has had a very powerful impact on the real economy. Because banks are not lending, investment...
Words: 5327 - Pages: 22
...Jay Brinkmann, Ph.D. Senior Vice President, Research and Business Development Chief Economist Mortgage Bankers Association Michael Fratantoni, Ph.D. Vice President, Research and Economics Mortgage Bankers Association Anatomy of Risk Management Practices in the Mortgage Industry: Lessons for the Future © Research Institute for Housing America May 2010. All rights reserved. 3 Table of Contents Executive Summary 1. Introduction: Findings and Recommendations 2. A Model for Mortgage Risk Taking: Growth, P / E and the Fallacy of ROE 3. Data and Model Limitations Data Integrity Economic Environment Mortgage Products and Risk Layering Borrower and Counterparty Behavior 4. Governance, Corporate Culture and Risk Taking: A Behavioral Economics Approach 5. Lessons Learned 6. References 7 9 19 27 29 31 32 38 43 53 57 Anatomy of Risk Management Practices in the Mortgage Industry: Lessons for the Future © Research Institute for Housing America May 2010. All rights reserved. 5 Executive Summary Not since the Great Depression has there been a...
Words: 6191 - Pages: 25
...서울대학교 法學 제51권 제3호 2010년 9월 125∼180면 Seoul Law Journal Vol. 51 No. 3 September 2010. pp. 125∼180 글로벌 금융위기와 금융산업의 구조재편* - 금융산업의 역사와 발전전략 1) 金 和 鎭 요 약 ** 이 논문은 글로벌 금융위기 이후 진행되어 온 미국과 유럽 금융산업의 재편 동향을 정리하고 그로부터 정책적 시사점을 찾기 위한 것이다. 특히, 미국에서 투자은행업과 상업은행업을 재분리하려는 개혁 움직임이 2010년 7월에 제정된 미국의 금융규제 개혁법에 어떻게 반영되었는지를 역사적 배경과 함께 살펴보았다. 현재 국내에서 진행 되고 있는 유니버설뱅킹과 메가뱅크 논의가 미국과 유럽에서의 움직임으로부터 어떤 영향을 받을 것인지를 진단하였고 미국과 유럽의 주요 은행들의 사례를 검토하였다. 이 논문은 미국에서의 논의는 미국 특유의 정치적 상황의 부산물이므로 미국에서의 제도변화 동향에 지나치게 민감하게 반응하지 않으면서 메가뱅크 계획보다는 유니 버설뱅크 계획을 추진하는 것이 바람직하다고 결론 내린다. 이 논문은 상업은행업과 투자은행업간의 업무 경계획정 기준은 상업은행은 국가가 제공하는 안전망의 보호 하에 있기 때문에 그를 망각하지 않는 범위 내에서만 영업활동이 허락되어야 한다는 것으로 설정하자고 제안한다. 주제어: 상업은행, 투자은행, 유니버설뱅킹, 미국 금융규제개혁법, 헤지펀드 * 이 논문은 필자가 2010년 4월과 8월에 각각 한국금융투자협회에 제출한 연구보고서의 일부에 기초하였다. 이 논문에 귀중한 코멘트를 해 주신 심사위원님들께 감사드린다. ** 서울대학교 법과대학⋅법학대학원 부교수. 126 서울대학교 法學 제51권 제3호 (2010. 9.) I. 머리말 1. 문제 2008년 글로벌 금융위기 이후 새로운 국제금융질서를 모색하기 위한 범세계적인 노력이 전개되고 있다. 특히, 자본시장과 금융회사들에서 발생한 리스크가 적절히 통제되지 못하고 금융위기의 직접적인 원인이 되었으므로 이에 관한 문제의 포착과 해법의 발견에 많은 노력이 기울여지고 있다. 과도하게 복잡해지고 지나친 레버리 지를 사용한 금융상품의 거래 비중이 높아졌으나 그에 대한 각국 정부의 감독부족과 시장 투명성 확보 실패, 금융회사의 내부통제 기능 마비가 문제였음이 지적된다. 통상 서브프라임 모기지 시장의 붕괴와 파생금융상품의 과도한 판매와 유통이 금융 위기의 직접적인 원인이 되었다고 지적되나1) 글로벌 금융위기는 아직도 계속되고 있기 때문에 그 원인에 대한 본격적인 학술적인 연구는 아직 출현이 이르다. 금융 위기의 과정과 거대 금융기관들의 몰락, 구조조정을 다루는 책과 논문들이 이제 서서히 등장하고 있을 뿐이다. 아마도 이는 후세의 역사가들에게 1차 세계대전의 원인이 어디에 있었는지를 규명하는 작업처럼 어려운 과제가 될 것이다. 글로벌 금융위기의 발원지인 미국에서는 포괄적인 금융개혁이 진행되고 있으며 그 중 가장 중요한 것으로 상업은행업무와 투자은행업무를 다시 분리시키려는...
Words: 17437 - Pages: 70
