SimCorp StrategyLab publishes book “Understanding the financial crisis: Investment, risk and governance”

“Understanding the financial crisis: Investment, risk and governance” is a new
229-page book published by SimCorp StrategyLab with contributions from a wide
range of senior practitioners from prominent financial institutions and senior
scholars from world leading business schools and universities. The book gives
suggestions as to why the financial crisis happened. More importantly, it
presents thoughts and recommendations on how to avoid similar meltdowns in the
future and serves as a contribution to the work-in-progress aimed at building a
new, sustainable financial system. 

Excessive risk-taking in the financial sector, poor corporate governance and
inadequate regulation and enforcement have led to the worst financial crisis
since the Great Depression. Many people worldwide have lost their homes, their
jobs, their savings and not least their confidence in the financial sector and
the laws and entities regulating it. The question is, what happened and how can
similar situations be avoided in the future? “Understanding the financial
crisis: Investment, risk and governance” is one of the most authoritative and
comprehensive books available on the subject and looks at the financial crisis
from a global perspective. 

The book is an anthology reflecting experience, research and thought leadership
from experts, specialists and practitioners within various disciplines
including finance, economics, mathematics, risk, governance, compliance, IT and
regulation among others. It also includes interviews with executives from
prominent financial institutions including Deutsche Bank; Allianz SE; and one
of Europe's largest public pension funds, ATP. 

Featured expert contributors
There is a total of 11 chapters, which includes the works of eight professors
from around the world including: 
•  Ingo Walter, director of SimCorp StrategyLab, Ph.D. and professor, Stern
School of Business, New York University; 
•  John Hull,  Ph.D. and Maple Financial Group Professor of derivatives and
risk management, Joseph L. Rotman School of management, University of Toronto; 
•  Renée Adams, Ph.D. and professor of finance at the University of Queensland;
•  Jean Dermine, Ph.D. and professor of banking and finance at INSEAD,
Fontainebleau; 
•  David Lando, Ph.D. and professor of finance at the Copenhagen Business
School; 
•  Caspar Rose, Ph.D. and professor at the Copenhagen Business School; 
•  Steen Thomsen, Ph.D. and professor at the Copenhagen Business School;
•  Ole Risager, Ph.D. and professor at the Copenhagen Business School; 
•  Kjell Johan Nordgard, Senior Vice President at SimCorp  
•  Marc Schröter, Vice President at SimCorp

Among many other considerations, the book suggests that if the cash flows from
a product cannot be calculated in a relatively straightforward way, the product
should not be traded. Other contributors indicate that the set of reforms
proposed recently by national and international groups to reduce the risk of
global banking crises constitutes an incomplete reform agenda. 

The book discusses the use of mathematical models in risk management and argues
that they can be used to create scenarios that allow better understanding.
Also, one of the most hotly debated subjects within enterprise architectures
and IT solutions, the question of best-of-breed versus integrated solutions is
discussed, concluding that no matter which operating model investment managers
have, they should seek to have a core data master as part of their enterprise
architecture to meet their strategic challenges. 

In the area of governance, the book demonstrates how boards of banks receiving
bailout money were more, rather than less independent than those of other
banks. Thus independence is no guarantee of effective risk management. The book
then suggests how information technology can strengthen emerging practices in
governance, risk and compliance. Finally the book addresses the issue of
reputational risk and argues that financial institutions are particularly
vulnerable to reputation risk because they depend so much on confidence. 
  
“Understanding the financial crisis: Investment, risk and governance” is the
first volume in a series of three, to be published by SimCorp StrategyLab,
resulting from its research programmes within the investment management
industry. It is available from amazon.com. 

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Enquiries regarding this announcement should be addressed to: 
Lars Falkenberg, Assistant Director, SimCorp StrategyLab (+45 35 44 88 00/+45
26 30 01 27) 
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SimCorp StrategyLab 
SimCorp StrategyLab is a private research institution, headed by Mr Ingo
Walter, Seymour Milstein Professor of Finance, Corporate Governance and Ethics
at Stern School of Business, New York University. SimCorp Strategy Lab's
research work focuses on identifying, understanding and suggesting solutions to
issues pertaining to mitigating risk, reducing cost and enabling growth in the
investment management industry. www.simcorpstrategylab.com