Knowledge and Training for Financial Decision Making!

NEWSLETTER of September 7, 2018

 

The following content has been added at finexpert:


Capital Market Data

We updated the capital market data

(Svensson-Yield Curve) as to September 3, 2018. For data access, you must be a basic finexpert member.>more

Tutorials
QoD8

Question of doubt in corporate valuation QoD#8: Shall I apply fade factors on the growth rate in terminal value calculation? (Bernhard Schwetzler)

Many practitioners feel uncomfortable with the assumption of a constant infinite growth rate in the terminal value calculation. Some authors propose to limit growth by applying a fade factor on the growth rate. This video discusses and analyzes this idea.
(September 7, 2018). >more


Studies > Performance

Roland Berger Strategy Consultants

A NEW BUSINESS MODEL FOR CORPORATE AND INVESTMENT BANKING

New players in the banking industry usually attack via three anchor points: the client interface, the product offering or the technology. To face this challenge head-on and deal with the all-round digital impact, banks need to refocus their offering along the lines of the attack and focus on being one of three archetypes: the relationship expert, the product expert, or the technology service provider. >more

Studies > Performance

Bain & Company

PREVENTING DISASTER: HOW BANKS CAN MANAGE OPERATIONAL RISK

Banks have struggled to control operational risk, which is the risk of loss due to errors, breaches, interruption or damages. In particular, major banks have suffered nearly $210 billion in operational risk losses since 2011. The key to effective operational risk management is training people to anticipate what could go wrong especially when a business unit is about to do something new. >more

Studies > Performance

The Boston Consulting Group

A REALITY CHECK FOR BLOCKCHAIN IN COMMODITY TRADING

To the commodity traders that support it, blockchain technology is a panacea. Blockchain-based platforms promise to improve the way the commodity-trading industry operates by addressing its struggles: with inefficiencies and issues of trust and with the complexity of transactions, which typically involve multiple counterparties. It’s no surprise, then, that senior executives are lining up to invest in blockchain. >more

Studies > Alternative Investments

Alternative Investment Management Association (AIMA)

INDUSTRY LEADERS ON THE FUTURE OF THE HEDGE FUND INDUSTRY

The Alternative Investment Management Association spoke to 25 hedge fund industry leaders about innovations in the sector, from the impact of artificial intelligence and ESG to how the manager/investor relationship is evolving. The picture those individuals painted in our conversations was of an industry embracing change while staying true to its primary focus of delivering for investors. >more


Research Papers > Corporate Governance

DO INSTITUTIONAL INVESTORS DRIVE CORPORATE SOCIAL RESPONSIBILITY? INTERNATIONAL EVIDENCE

I.J. Alexander Dyck, Karl V. Lins, Lukas Roth, and Hannes F. Wagner
2018
This paper assesses whether shareholders drive the environmental and social (E&S) performance of firms worldwide. Across 41 countries, institutional ownership is positively associated with E&S performance with additional tests suggests this relation is causal. Institutions are motivated by both financial and social returns. Investors increase firms’ E&S performance following shocks that reveal financial benefits to E&S improvements. In cross-section, investors increase firms’ E&S performance when they come from countries where there is a strong community belief in the importance of E&S issues, but not otherwise. As such, these institutional investors transplant their social norms regarding E&S issues around the world. >more

Research Papers > Corporate Finance

FINTECH, REGULATORY ARBITRAGE, AND THE RISE OF SHADOW BANKS

Greg Buchak, Gregor Matvos, Tomasz Piskorski, and Amit Seru
2017
Shadow bank market share in residential mortgage origination nearly doubled from 2007-2015, with particularly dramatic growth among online “fintech” lenders. We study how two forces, regulatory differences and technological advantages, contributed to this growth. Difference in difference tests exploiting geographical heterogeneity induced by four specific increases in regulatory burden – capital requirements, mortgage servicing rights, mortgage-related lawsuits, and the movement of supervision to Office of Comptroller and Currency following closure of the Office of Thrift Supervision - all reveal that traditional banks contracted in markets where they faced more regulatory constraints; shadow banks partially filled these gaps. Fintech lenders appear to offer a higher quality product and charge a premium of 14-16 basis points. Relative to other lenders, they seem to use different information to set interest rates. A quantitative model of mortgage lending suggests that regulation accounts for roughly 60% of shadow bank growth, while technology accounts for roughly 30%. >more