Professor Viral Acharys Dicusses the Impcats of Chinas’ Shadow Banking with Professor Daniel Altman in a Recent Foreign Policy Interview

The following is an Excerpt from Foreign Policy:

Viral Acharya, NYU Stern“Foreign Policy: The margin-based lending has been a big story, but your research suggests that another source of leverage is the shadow banking system. How did that happen?

Viral Acharya: Shadow banking in China has grown tremendously in dollar terms, to more than $2 trillion. It is made up of attempts by regulated banks to issue deposit-like products — but not actual deposits — and offer higher interest rates to investors, given that deposit rates are regulated and suppressed. Banks float wealth management products as trusts, their own special purpose vehicles, marketing them as relatively safe paper and offering higher rates than regulated deposit rates. Of course, the higher rates have to be generated in some way, so they often find their way into riskier projects. The bulk of this was going into real estate and infrastructure built by municipalities.”

Read the full interview here.

Posted in Market Risk, Structured Finance, Systemic Risk | Tagged , , , , | Leave a comment

Professor Michael Spence on the Recent Global Market Volatility

The following is an excerpt from a recent op-ed published in The Huffington Post by NYU Stern Professor, Michael Spence titled “China’s Volatile Stock Market Does Not Reflect Real Economic Conditions.”

Markets plunged again this week, a mini quake with the apparent epicenter in China. The question on the minds of economic policy makers and investors is what is going on and what will the future hold?

It would be tempting to attribute all of this to fears of faltering growth and imbalances in the Chinese economy. But that can’t be right. The Chinese economy, at roughly three quarters the size of America’s and Europe’s, is systemically important. But even an extreme slowdown in China would not derail the whole global economy.

The overriding context appears to be extreme uncertainty about the causes and consequences of these moves, leading to very high volatility.

It seems natural to ask whether the perceived trajectory of the global economy has shifted downward as much as the movements in the equity markets might seem to suggest. The answer seems clearly to be no.

Read the full article here.

Posted in Market Risk, NYU Stern, Volatility | Tagged , , , , | Leave a comment

MSRM Class of 2015 Alumni Profile: Mohammed Al-Obaid

MohammedMohammed was fairly new in his position as head of risk management for Saudi Arabia’s Jadwa Investment when he entered NYU Stern’s Master’s in Risk Management program. During the course of the program, his skill set and perspective on his chosen field grew along with him in the job, a perfect match. “Thanks to Stern, I have already gained by being ahead of the curve in risk management, as I now have the ability to manage risk from a broad systemic and strategic perspective with a focus on enterprise-wide risk management,” he says. Jadwa, founded in 2006 and based in Riyadh, is an investment management and advisory firm.

Since earning an undergraduate finance degree in 2003 from Saudi Arabia’s King Fahd University of Petroleum and Minerals and beginning his career in that field within the so-called semi-government sector, Mohammed’s skills and horizons have steadily expanded. He moved from the industrial lending department at Saudi Industrial Development Fund to the private sector, staying more than five years at Al Rajhi Banking and Investments Group, the leading Islamic bank. There he explored corporate and investment banking, distinguishing himself by developing an innovative risk management model, policies, and procedures and earning a promotion to vice president of risk management. In the Saudi market, where most risk management executives are expatriates, Mohammed is a local pioneer in the field.

Despite his success at a young age, he was perspicacious enough to realize that to stay ahead of the curve and be a leader, he needed to pursue more education in risk management, especially in regard to global business trends and best practices. Stern’s MSRM offered it all, he says. “Stern provided the ideal opportunity to cultivate my understanding of risk within a classroom setting, where I could also explore innovative ideas with an accomplished and diverse student body. The robust curriculum and global perspective were exactly what I was seeking.”

Adds Mohammed: “The MSRM’s rich curriculum, presented through its five-module structure, is perhaps only trumped by its dynamic student body and world-class faculty. This program helped me to understand the strategic dimensions of risk management and prepared me for the next move in my career, toward playing a strategic role in business development at the corporate executive level.  Stern’s MSRM program helped make this a reality rather than an opportunity.”

Read more MSRM Alumni Profiles on our website here!

Posted in MS in Risk Management Program, NYU Stern | Tagged , , | Leave a comment

MSRM Class of 2016 Opens the Amsterdam Stock Exchange!

On Tuesday, August 11, 2015, the NYU Stern MSRM Program rang the gong to open the Amsterdam stock exchange. The MSRM Program travels to Amsterdam to host Module 2 August 10-15, 2015 at the Amsterdam Institute of Finance. The program covers derivatives securities, risk analytics, Market Risk, Var and RAROC during Module 2.

View more information on the Gong Ceremony here!

Posted in Market Risk, MS in Risk Management Program, NYU Stern | Tagged , , , , , | Leave a comment

National Stock Exchange of India and NYU Stern starts Indian Financial Markets Conference 2015

Stern-NSEThe National Stock Exchange (NSE), India’s leading stock exchange, and New York University Stern School of Business (NYU Stern), one of the world’s premier research and teaching institutions, began their third annual ‘Indian Financial Markets Conference 2015’ today in Mumbai, India. This two-day conference is an outcome of the joint initiative by the NSE and NYU Stern to: (a) promote the study of Indian financial markets, (b) provide a platform for industry and academia to complement each other, and (c) deliver effective research support for policy making. The primary objective of this conference is to present and discuss the research papers which were selected on the basis of a global call for papers.

The NSE-NYU Stern Indian Financial Markets Conference 2015 is convening a number of financial market leaders from industry, the public sector and academia.

“While we, at NYU Stern, understand the markets and institutions in developed economies to an extent, we need to do much more work to understand more fully the markets and institutions in emerging markets, such as India.  The NSE-NYU Stern partnership provides a network of academics interested in studying the Indian financial markets,” said Professor Viral Acharya of NYU Stern.

Read the full press release here.

More coverage was also featured on India Education Diary.

Posted in MS in Risk Management Program, NYU Stern, Regulatory Risk, Sovereign Risk | Tagged , , , , | Leave a comment