ICMA Centre Blog

Taking on the UK Investment Banking Series 2015

Ellis Murley, first year BSc Finance & Investment Banking, blogs about his experience taking on Masters students nationwide in a UK-wide trading challenge, alongside peers from his course.

Why walk away from a US$ 65bn brand to become the CEO of an Alphabet?

By Andreas Hoepner, Associate Professor of Finance and Director of Enterprise at the ICMA Centre. If you owned a brand with an estimated Forbes value of over US$ 65 billion (#3 in the world) would you walk away from it? Well, Larry Page did and put a new household name ‘Alphabet’ on the corporate landscape. But…

Is it true that the unsung virtue of derivatives is embedded financing?

A recent report by the US consultancy Finadium lauded a paper by Professor Bruce Tuckman of the NYU Stern School of Business who wisely cautioned against too severely discouraging the use of derivatives through regulation. The main argument by Prof Tuckman is that derivatives and forwards can provide synthetic positions that have equivalent risk exposures…

A look at Greece’s new austerity bill

George Alexandridis is an Associate Professor at the ICMA Centre and specialises in Corporate Finance and Shipping Finance. He is also the founder and Director of the MSc in International Shipping and Finance. By George Alexandridis In Greece and elsewhere many rushed to label the deal attained at the Euro-summit on Monday morning a coup and…

Anxiety, Overconfidence and Excessive Risk-Taking

I have been doing some work on money market codes of conduct. In my research, I came across a fascinating article on “Anxiety, Overconfidence and Excessive Risk-Taking” by Thomas Eisenbach and Martin Schmalz (FRBNY Staff Report No.71, March 2015). The authors note that it is widely accepted and well substantiated that people tend to systematically…

Do bans on naked short-selling undermine price discovery? A new paper every regulator should read.

In a recently published research paper, ‘Fails-to-Deliver, Short Selling and Market Quality’, three academics from Warwick University — Veljko Fotak, Vikas Raman and Predeep Yadav — attempt to measure the impact on market quality of regulatory measures to prohibit settlement failures in the US equity market. It is an excellent piece of practical research and…

Academics need a ‘living wage’ too — consultants please note!

Dear consultancy firms, You frequently ‘phone and e-mail me to talk about the repo market. You want to pick my brains. No problem. I would like to pick yours. Occasionally, we have had an exchange of information, not necessarily a fair exchange but enough for me to be able to say that I have learnt…

Say goodbye to ‘re-hypothecation’ and ‘re-use’. Say hello to ‘re-sale’

What’s in a word? Well, in the quasi-legal world of regulation, it can be everything! For example, in the post-crisis regulatory dialogue over the repo market, the words ‘re-hypothecation’ and ‘re-use’ have been causing endless mischief. This blog proposes that we therefore dispense with those misnomers and import the word ‘re-sale’ as a less ambiguous…

Embrace the Unexpected

Viktoria Löeffler is one of the ICMA Centre’s student ambassadors who was awarded one of ten ambassador scholarships for 2014/15. As part of their role they occasionally share their experience of studying finance in the UK in a series of blog posts. By Viktoria Löeffler When I started my course in Behavioural Finance at the…

Trading Death: The Implications of Annuity Replication for the Annuity Puzzle, Arbitrage, Speculation and Portfolios, International Review of Financial Analysis.

By Professor Charles Sutcliffe All defined benefit pensions, as well as the state pension, effectively provide pensioners with an annuity – a regular stream of payments that continues until death. In addition, members of defined contribution schemes have to buy an annuity with their pension pot. (In April 2015 this obligation for defined contribution…