“Dealers can accommodate a one-way flow, but high-frequency traders don't want to take inventory because they are very lean,” said Haoxiang Zhu, an assistant professor of finance at MIT Sloan, who studies asset pricing and financial-market structure. “Matched orders are easier to execute. Huge one-way flows could be trickier.”
There appears to be a close connection between starting one's career in a recession and developing a reputation as a conservative, low-risk manager, says Antoinette Schoar, a professor of finance at the MIT Sloan School of Management, who did the study along with Luo Zuo, an assistant professor of accounting at Cornell University.
The recent MIT Sloan conference, “FinTech and the Disruption of Finance,” addressed how big data, machine learning and blockchain technology can provide customized products and services. In her “Mastering FinTech for a Changing World” presentation, Antoinette Schoar, a professor of entrepreneurial finance at MIT Sloan, showed logos of some 1,800 so-called fintech startups that have launched in the past few years to fill gaps left by traditional institutions.
In a keynote address this month, Robert C. Merton, distinguished professor of finance at the MIT Sloan School of Management and 1997 Nobel Laureate in Economics, spoke at the 2016 Retirement Investing Conference in Oxford, England, sponsored by the Journal of Investment Management (JOIM), Oxford University and the EDHEC Risk Institute.
Credit-card terms offered to more financially sophisticated consumers differ significantly from those offered to less sophisticated customers, according to research by WSJ Expert Antoinette Schoar, who is professor of entrepreneurial finance and chair of the finance department at MIT Sloan.
“Imagine if all your traders were required to wear wristwatches that monitor their physiology, and you had a dashboard that tells you in real time who is freaking out,” said Andrew Lo, MIT professor of finance.
Massachusetts Institute of Technology Professor of Finance Andrew Lo discusses the importance of monitoring the emotions of traders on "Bloomberg Markets.”
Leveraged buyouts are a powerful tool to alter incentives in firms and improve their corporate governance. Despite these benefits, the use of the buyout transaction varies wildly over time. What explains this dramatic time-variation in activity? Prior literature and the popular press largely focus on how the cost of debt impacts buyout activity, as debt is a key input to the buyout transaction. Another popular explanation is a periodical form of irrational exuberance for buyouts. In Buyout Activity: The Impact of Aggregate Discount Rates (forthcoming, Journal of Finance), we argue that these approaches miss the forest for the trees: the overall cost of capital, rather than debt alone, is the primary driver of buyout activity.
The director of the Laboratory for Financial Engineering at MIT, Professor Andrew Lo, believes that there has been a step-change in the technology: "All new technologies come with a certain degree of hype, but I do think there has been a material change in the technology today against where things stood even just five years ago."
Jonathan Parker is a finance professor at MIT's Sloan School of Management. He says, “When interest rates are extremely low then government spending is relatively cheap, and so that suggests that it's a good time to do things that you think you have to do at some point.” (1:47)
Haoxiang Zhu, a professor at MIT, studied the Fed's experience with reverse auctions in a paper published this year. He tells Central Banking it is "puzzling" the BoE's auction ran into trouble. "Market participants can always submit high-priced offers opportunistically – the worst case is that these offers are rejected by the BoE," he says. "It is difficult to believe that market participants are unwilling to sell at any price."
The academic community has wrestled for years with how best to assess and attribute returns generated by the growing army of hedge funds. The complexity in these funds' various methodological recipes pose a complicated analytical problem for academic researchers. MIT Sloan Professor Andrew W. Lo and his co-authors, Mila Getmansky Sherman, and Peter A. Lee, recently published a paper titled “Hedge Funds: A Dynamic Industry in Transition” that addresses this issue.
As technology continues to create disruption and innovation in the financial industry, an increasing number of MBA programs are adding fintech (financial technology) to their curricula. NYU Sternannounced a new fintech specialization in June, while UC Berkeley-Haas and MIT Sloan have been offering fintech courses since 2015.
Paying small suppliers late leads to a cash crunch and stressed-out entrepreneurs. But new data provides quantitative evidence behind the anecdotes of squeezed small businesses in the U.S.
The MIT Sloan School of Management and Harvard Business School conducted a study to examine the impact of new rules, which came into effect in 2011, dubbed “QuickPay” rules. Those guidelines accelerated payments to SME government contractors by 15 days, leading to a value of about $64 billion worth of contracts every year, reports said.
When it comes to corporate finance, Stewart Myers wrote the book—and some of the most important papers, too.... But in five decades as the go-to expert in his field, Myers—a finance professor at MIT Sloan—did something else remarkable. He earned the respect, admiration, and affection of everyone he’s worked with. Perhaps more than his seminal contributions to corporate finance, this, his colleagues say, is why Stew Myers matters.
The MIT Sloan School of Management recently announced that Robert C. Merton, a Nobel laureate in Economics and the School of Management Distinguished Professor of Finance, was named the recipient of the S. Donald Sussman Fellowship. The Fellowship is awarded to individuals or groups who best exemplify S. Donald Sussman’s career as a successful investor in quantitative investment strategies and models. Merton was selected for his wide-ranging contributions to modern financial economics, from his earlier work in modeling derivative securities to his more recent research on achieving financial security in retirement.
The MIT Sloan School of Management announces a major gift from alumnus Bennett (Ben) W. Golub to support the MIT Center for Finance and Policy. Dr. Golub is senior managing director and chief risk officer of BlackRock, the global investment and risk management firm. In recognition of his gift, the Center will be named the Bennett W. Golub Center for Finance and Policy (GCFP). The mission of the Center is to serve as a catalyst for innovative, cross-disciplinary and nonpartisan research and educational initiatives that address the unique challenges facing governments in their role as financial institutions and as regulators of the financial system.
Assistant Professor of Finance, Haoxiang Zhu, was voted as one of the 2016 Best 40 Under 40 Professors by PoetsandQuants.com, a news website which covers news related to business schools and MBA programs.
The student led MIT Impact Investing Initiative (MI3) took home the grand prize at MIINT, a $50k early stage impact investing competition with 25 participating teams from top ranked universities around the world (incl. HBS, Wharton, Stanford and Kellogg).
Richard Thakor won the 2016 MIT Sloan thesis prize for demonstrating that limiting financial constraints on a business can reduce the misallocation of assets and trigger economic growth.