Some Reflections On The Crisis And Its Implications For Managing Financial Ris
Centre for Asset Management Research & Investments (CAMRI)
|Speaker||Professor Stephen A. Ross
Franco Modigliani Professor of Financial Economics
Professor of Finance, MIT Sloan School of Management
|Chairperson||Professor Joseph Cherian
Practice Professor of Finance and Director of CAMRI
NUS Business School
|Date||Monday, 7 March 2011|
|Time||4.00 pm - 5.30 pm (Registration starts at 3.30 pm)|
|Venue||BIZ 1 Seminar Room 3-2 (map)
Level 3, Mochtar Riady Building
NUS Business School
15 Kent Ridge Drive
The causes of the crisis are still being debated but the roots lie more in political economy than in the more straightforward realm of financial economics. For all the rhetoric now directed at financial reform, the principal issues such as mandating adequate bank capital, remain unaddressed and there will be more crises. While diversification is still a necessary and pivotal component of any prudent investment philosophy, on its own it is not sufficient to cope with such future crises. What is needed is a recognition that controlling risk involves not just controlling the inputs, e.g., through diversification, but also controlling the actual results. This can be done by a significant use of the hedging opportunities available through the world wide derivatives markets. Derivatives weren’t the disease that caused the crisis and they are a part of the cure.
About the Speaker
Stephen A. Ross is the Franco Modigliani Professor of Financial Economics at MIT, Managing Partner of Ross Farrar, and Principal and CIO of Ross Institutional Investors, LLC. He was previously the Sterling Professor of Economics and Finance at Yale University and, before that, a Professor of Economics and Finance at the Wharton School of the University of Pennsylvania.
Professor Ross is the author of more than 100 articles in economics and finance and is the coauthor of an introductory textbook in finance. He received his B.S. with honours from CalTech in 1965 where he majored in physics, and his Ph.D. in economics from Harvard in 1970. While he has worked on a variety of topics in economics and finance, he is probably best known for having invented the Arbitrage Pricing Theory and the Theory of Agency, and as the co-discoverer of risk neutral pricing and of the binomial model for pricing derivatives. Models developed by him and coworkers, including term structure models and option pricing models, are now standards for pricing in major securities trading firms. He has been the recipient of numerous prizes and awards including the Graham and Dodd Award for financial writing, the Pomerance Prize for excellence in the area of options research, the University of Chicago's Leo Melamed Prize for the best research by a business school professor and the 1996 IAFE Financial Engineer of the Year Award. In 2006 he was the first recipient of the CME-MSRI Prize in Innovative Quantitative Application and in 2007 he won the Jean-Jacques Laffont Prize given by the Toulouse School of Economics. A Fellow of the Econometric Society and a member of the American Academy of Arts and Sciences, he currently serves as an Associate Editor of several economics and finance journals and in 1988 was President of the American Finance Association.
Ross Farrar is a registered investment advisor and manages derivative portfolios and exposures designed to provide risk control solutions to institutional investors tailored to their needs and goals. Ross Institutional Investors, LLC, evaluates and accesses a variety of niche alternative investments for its clients. Ross has been a consultant to a number of investment banks as well as many major corporations, and he has served as an advisor to government departments such as the U.S. Treasury, the Commerce Department, the Internal Revenue Service and the EXIM Bank. He co-founded and was the co-chairman of Roll and Ross Asset Management Corp., an equity money manager, chairman of the American Express Advisory Panel, and a former director of General Re, CREF and Freddie Mac. He is currently Chairman of the Investment Advisory Board of IVC International, Ltd., a director of IV Capital, and a trustee of Caltech where he chairs the investment committee.