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Über dieses Buch

This book brings together a good mix of academics and practitioners for a discussion that focuses on how to change financial practice and the academic field of finance in order to understand the current financial crisis and deal with future turbulent financial times. The volume is based on contributions by prominent academics and practitioners from Europe, Asia and the USA. The book contains several essays, most prominently by Maurizio Murgia, an internationally renowned European corporate finance scholar, and Robert E. Krainer, a senior professor with banking and business cycles research interest from University of Wisconsin-Madison. This book also deals with pedagogical, empirical and theoretical considerations in light of the crisis.



Introduction: Finance and the Financial Crisis

Consider that you are about to undertake a long-term project, such as building a house, providing piano lessons as an ongoing business, growing apples, or manufacturing a new medicine. Within the academic field of finance, the goal of this project is to maximize the value of what you produce. The best way to put a measurable value on your project’s output is to wait until it is produced and see how much it sells in the marketplace. That is, the future market value of your output measured in monetary terms can be used to arrive at an accurate indication of your project’s current value.

Ted Azarmi

Corporate Governance and Restructuring Through Spin-Offs: European Evidence

Various aspects of corporate governance in the process of corporate restructurings are analyzed using the sample of completed spin-offs in 12 European countries between 1989 and 2005. We show that spin-off decisions are often triggered by firm’s governance earthquakes, such as an appointment of a new CEO or a takeover threat. Abnormal long-run stock returns and operating performance are observed for spin-off firms only and mostly for internally grown business units and parent-related (non-focusing) subsidiaries. We find no evidence that post-spin-off mergers of either parents or subsidiaries enhance long-term performance or that focus-increasing spin-offs lead to efficiency improvements.

Dmitri Boreiko, Maurizio Murgia

Alternative Specifications of Bank Lending in France and Germany: Theory, Evidence, and Policy Implications

In this chapter, I compare a capital budgeting model of bank lending based on stock valuations to a supply/demand model based on an interest rate channel for France and Germany using non-nested hypothesis tests and omitted variables tests. For France, the results of these two statistical tests indicate a strong rejection of the supply/demand model with an interest rate channel and non-rejection of the capital budgeting model. The results for Germany are mixed. For Monetary Financial Institutions, the non-nested hypothesis test and omitted variables test rejected both models. For the banking sector of Monetary Financial Institutions, both tests rejected the supply/demand model but did not reject the capital budgeting model. Do these results have any implications for policy? If volatility in share prices leads to volatility in bank lending which in turn leads to volatility in real economic activity, then governments may want to begin thinking of ways to dampen the volatility in the stock market.

Robert E. Krainer

Toward Banking Union in Europe: An Interim Assessment

This chapter reviews the main elements of the progress toward a banking union in Europe and addresses some of the challenges on the way forward. It discusses the changing banking landscape and the current fragmentation of European markets. This chapter also reviews the main elements of the anticipated European banking union and analyzes some of the challenges on the way toward an eventual full-fledged banking union.

Christian Schmidt

A World Without Money Needs No Banks and No Rating

Our economic environments have become more volatile and financial tools ever more sophisticated. This chapter presents a disruptive idea in a different direction. Fiat money in the past never lasted for more than 4–5 decades before related systems collapsed. Prof. Schneck presents a thought-provoking alternative—a world without money, therefore without rating agencies and related problems. Five scenarios are presented and critically discussed, questioning assumptions and drafting alternative futures.

Ottmar Schneck

Put–Call Parity Violations Under Limited Arbitrage: A Case Study and a Simulation Tool for Detecting Financial Irregularity

We use simulated data to examine the ability of standard statistical tests to detect the presence of price pressure resulting from attempts to manipulate the stock options market. We find limited ability of difference tests to detect anomalous price pressure in cases where limits to arbitrage are absent or the degree of price pressure is low and when the anomalous price pressure occurs for a short period relative to the overall window analyzed. To help with pedagogical use of our method, we provide a detailed case study of Porsche’s takeover attempt of Volkswagen (VW). The case study helps students to devise classroom tools for detecting and taking timely actions against financial misconduct.

Ted Azarmi, Paul Borochin

Enabling Holistic Finance Education in Turbulent Times

Prof. Amann clarifies that executive education must be fully customized to fit the course participants exactly at the level where they are in in their careers. With the help of the development channel as a concept, he outlines that motives, learning needs, and personal challenge vary over time. He also clarifies that textbook approaches do not generally work at times of disruptive change and ongoing volatility, and during major crisis in our business environments. Complexity skills must represent an essential element of a holistic finance education as it is the case with a solid ethics and humanism training.

Wolfgang Amann

Actual Problems of Finance Teaching in Ukraine in the Post-Crisis Period

This chapter reports on the state of finance teaching in Ukraine following the worldwide financial crisis of 2008. It focuses on teaching behavioural finance and making appropriate revisions in the economic theory so that it can be utilized in a transitional economy such as the one in Ukraine.

Serhiy Lyeonov, Olga Liuta

Executive Compensation and Risk Taking: The Impact of Systemic Crises

It is widely accepted that managerial compensation packages contributed to the excessive risk-taking practices that led to the onset of the Great Recession (2007–2009). We argue that the relationship between managerial compensation and risk taking is procyclical. A given level of performance incentives may result in significantly lower firm risk when economy is in a systemic crisis because managers face an increased employment risk during economic downturns. Students of finance who will become policy makers or who will sit on compensation committees would benefit from realizing that in order to implement a given level of firm risk, managerial compensation packages may need to be adjusted according to the state of the economy.

Alon Raviv, Elif Sisli-Ciamarra

Measuring the Success of Executive Education: Comprehensively Depicting Holistic Finance Education

Past approaches to depicting value in executive education seminars were limited to participants’ satisfaction, transfer of knowledge into the businesses, observing behavioral change, and making progress towards measuring impact. There is another layer which starts to matter, especially since many of the recent crises originate in short-termism, greed, and opportunistic behavior of a minority of players. This chapter presents and discusses a holistic six-level framework for a more modern approach of evaluating training and executive education seminars.

Wolfgang Amann

Conclusion: Emerging Insights on Teaching Finance in Turbulent Times

This chapter presents the principal insights from the learning journey into the implications of the largest financial crisis in the last 90 years. Research and teaching have hitherto been based, to some extent, on questionable or wrong assumptions and frameworks. Beyond concepts on financial modeling, the underlying assumptions on human nature are in need of an overhaul. Homo economicus thinking characterized by the infinite ability to make rational decisions represents just one possible view which should guide research, teaching, and action in financial institutions.

Wolfgang Amann
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Blockchain-Effekte im Banking und im Wealth Management

Es steht fest, dass Blockchain-Technologie die Welt verändern wird. Weit weniger klar ist, wie genau dies passiert. Ein englischsprachiges Whitepaper des Fintech-Unternehmens Avaloq untersucht, welche Einsatzszenarien es im Banking und in der Vermögensverwaltung geben könnte – „Blockchain: Plausibility within Banking and Wealth Management“. Einige dieser plausiblen Einsatzszenarien haben sogar das Potenzial für eine massive Disruption. Ein bereits existierendes Beispiel liefert der Initial Coin Offering-Markt: ICO statt IPO.
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