The following is an op-ed by Roy Smith, published in Financial News on 6/3/13:
The decisive victory that allows Jamie Dimon to continue in his dual roles as chairman and chief executive of JP Morgan Chase raised once again the issue of whether or not holding both titles is detrimental to corporate governance.
Dimon won handily, as he should have done. But the vote was a disappointment to some corporate governance wonks, who believe all large publicly traded companies should have the same leadership structure.
Forceful leaders, they believe, need to be subject to the restraining influences of wise, avuncular, chairmen to keep the ship steady.
But no one has found compelling evidence to suggest that changing from single to dual roles noticeably improves corporate performance; the underlying strength of the board is much more important than whether one individual should have concentrated executive power.
The chief executives of the three most successful US banks, JP Morgan, Goldman Sachs and Wells Fargo, also occupy the position of chairman. (But so did the CEOs of Merrill Lynch, Bear Stearns, Lehman Brothers and Wachovia.)
And dual structure failed to keep AIG, Federal National Mortgage Association (Fannie Mae) or Citigroup out of trouble.
In Britain, similar dual commands failed to rein in Royal Bank of Scotland, Lloyds Banking Group or Barclays.
Years ago, the title of chief executive officer didn’t exist in the US. Instead most companies had different individuals as chairman and president, but it wasn’t always clear who was boss and accountable for the company’s results. Read the full article as published in Financial News.
Roy C. Smith is the Kenneth G. Langone Professor of Entrepreneurship and Finance and a Professor of Management Practice.
The Master of Science in Risk Management Program was proud to host its first Annual Risk Symposium on May 30-31. The Risk Symposium offered an impressive speaker lineup, including former TARP Inspector General Neil Barofsky, NYU Stern Dean Peter Henry, BlackRock Managing Director Paul Tice, and NYU Stern Professors Bill Silber and Richard Sylla. The symposium was held over two days and welcomed MSRM students, alumni, and guests from across the globe. MSRM alumni attended from as far as Sweden, Kenya, and the Netherlands. The 2-day event welcomed over 80 guests from over 20 countries.
Nouriel Roubini, Professor of Economics and International Business at NYU Stern, writes on the global economy. Roubini addresses the Eurozone, China, Japan, the Middle East, and the US, to paint a picture of a global economy where the US is “in the best relative shape” while Europe is “mired in recessions.” The following is an excerpt from his Project Syndicate Op-Ed: 
Bloomberg featured NYU Stern Professor Viral Acharya’s research in an article about fire sales risk and repo market reforms.
Viral Acharya, C.V. Starr Professor of Economics and Director of the NSE-NYU Stern Initiative on the Study of Indian Capital Markets, and his co-author, Ouarda Merrouche at The World Bank, studied the liquidity demand of large settlement banks in the UK and its effect on the Sterling Money Markets before and during the sub-prime crisis of 2007-08. They found that liquidity holdings of large settlement banks experienced on average a 30 percent increase in the period immediately following August 9, 2007 (the day when money markets froze, igniting the crisis). Following this structural break, settlement bank liquidity had a precautionary nature in that it rose on calendar days with a large amount of payment activity and more so for weaker banks. The researchers established that the liquidity demand by settlement banks caused overnight inter-bank rates to rise, an effect that was virtually absent in the pre-crisis period. This liquidity effect on inter-bank rates occurred in both unsecured borrowing as well as borrowing secured by UK government bonds. Further, the effect was experienced by all settlement banks, regardless of their credit risk, suggestive of an interest-rate contagion from weaker to stronger banks operating through the inter-bank markets. This paper is forthcoming in the Review of Finance. View the paper 