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The financial crisis 2007/2008 again revealed that counterparty risk is front and center in financial markets. A consequence of counterparty risk: reliable market participants, with a low default probability, can require extra compensation for trading with riskier counterparties – at… Continue Reading →
US economist Richard Thaler has been awarded the Nobel prize in economics in 2017. The Royal Swedish Academy stated that Thaler receives the award “for his contributions to behavioral economics”. How does this contribution look?
We supervised a thesis this semester on the impact of central clearing on market liquidity for credit default swaps (CDS). In this post, we want to share the main results.
How do you measure institutional investor attention? Aggregate attention is easier to capture. You can look at trading volume (which reflects the transactions of all investors) as an indirect measure. You can look at front-page articles in influential newspaper as… Continue Reading →
Job security is of major importance for most people – and fund managers are no exception. In their influential Quarterly Journal of Economics paper “Career Concerns of Mutual Fund Managers” from 1999, Chevalier and Ellison explore whether career concerns affect… Continue Reading →