Financial Services
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- 21 May 2019
- Working Paper Summaries
rTSR: When Do Relative Performance Metrics Capture Relative Performance?
Managers are increasingly evaluated based on relative performance metrics, particularly relative total shareholder returns (rTSR). This paper finds that the majority of firms that tie CEO performance-based contracts to rTSR do a remarkable job of filtering out the systematic risk in TSR. However, a significant portion of firms make relatively poor choices in the design and selection of rTSR, a result of weak governance and an overreliance on compensation consultants.
- 10 Apr 2019
- HBS Case
How Entrepreneurs Can Turn Lead Into Gold
Innovative about creating new products, entrepreneurs often lose imagination when it comes to funding their dreams. Andy Wu reveals alternatives beyond friends and family. Open for comment; Comment(s) posted.
- 03 Apr 2019
- Book
Fintech's Game-Changing Opportunities for Small Business
In the new book Fintech, Small Business, & the American Dream, Karen Mills describes how technology is opening up new capital for entrepreneurs. Around the corner: The transformative benefits of AI and big data. Open for comment; Comment(s) posted.
- 18 Feb 2019
- Working Paper Summaries
Diagnostic Bubbles
The financial crisis of 2007-2008 revived academic interest in price bubbles but many conceptual questions remain open. This paper generates insights into the structure of asset price bubbles by modeling beliefs from fundamental psychological assumptions, and combining this with standard neoclassical mechanisms, such as learning from prices and speculation.
- 30 Jan 2019
- What Do You Think?
Who Will Measure up to These Two Remarkable Leaders?
SUMMING UP. In the wake of the loss of two great CEOs, James Heskett asks which schools are ready to turn out the next generation of transformative leaders? Open for comment; Comment(s) posted.
- 15 Jan 2019
- Working Paper Summaries
The Creation and Evolution of Entrepreneurial Public Markets
Since 1990, new stock exchanges geared toward fast-growing, entrepreneurial companies have proliferated around the world. This analysis shows that exchanges in countries with better shareholder protection allowed younger and less profitable companies to raise more capital. These markets alone cannot boost entrepreneurial activity but need enabling institutions.
- 20 Dec 2018
- Cold Call Podcast
Using Fintech to Disrupt Eastern Bank from Within
When Eastern Bank decided to battle a threat from new competitors, it hired a fintech executive to set up Eastern Labs and start innovating. Karen Mills discusses her case study on what happened next. Open for comment; Comment(s) posted.
- 17 Dec 2018
- Research & Ideas
Women Receive Harsher Punishment at Work Than Men
Women caught in misconduct were 20 percent more likely to be fired and 30 percent less likely to find new employment in the financial services industry, reports new research by Mark Egan and colleagues. Open for comment; Comment(s) posted.
- 19 Nov 2018
- Working Paper Summaries
Lazy Prices
The most comprehensive information windows that firms provide to the markets—in the form of their mandated annual and quarterly filings—have changed dramatically over time, becoming significantly longer and more complex. When firms break from their routine phrasing and content, this action contains rich information for future firm stock returns and outcomes.
- 15 Nov 2018
- Working Paper Summaries
Do Fire Sales Create Externalities?
This paper contributes to our understanding of the role of large institutional investors in securities markets, providing evidence that the structure of the mutual fund industry increases the risks of costly "fire sales."
- 08 Nov 2018
- Working Paper Summaries
When Harry Fired Sally: The Double Standard in Punishing Misconduct
Despite committing misconduct less often and less severely than men, female advisers in the financial adviser industry face more severe punishment in the labor market, a finding strongly correlated with the gender composition of the managerial team. A similar punishment gap and mitigating factors affect ethnic minority men.
- 04 Oct 2018
- Research & Ideas
Diversity Boosts Profits in Venture Capital Firms
VC firms that score high in diversity among their partners also tend to be more profitable, according to Paul Gompers. Open for comment; Comment(s) posted.
- 09 Aug 2018
- Cold Call Podcast
Two Million Fake Accounts: Sales Misconduct at Wells Fargo
Coming out of the financial crisis, Wells Fargo was one of the world’s most successful banks. But then its sales culture went wild, opening more than 2 million fake accounts. Suraj Srinivasan discusses what went wrong. Open for comment; Comment(s) posted.
- 08 Aug 2018
- Sharpening Your Skills
Parmigiano-Reggiano, Jane Austen, and Other Things You Didn't Know About Finance
Why did Italian bank Credito Emiliano accept young Parmigiano-Reggiano as loan collateral? What can Jane Austen and Mel Brooks teach us about finance fundamentals? What's up with millennials and their Chase Sapphire Reserve cards? Our recent stories explain all. Open for comment; Comment(s) posted.
- 26 Jun 2018
- Working Paper Summaries
The Impact of Pensions and Insurance on Global Yield Curves
The global financial crisis and its aftermath had a dramatic impact on the solvency of pension funds and insurance companies. Drawing on a large cross-section of countries, this paper shows the importance of pension and insurance companies in determining the yields on long maturity bonds around the world.
- 20 Jun 2018
- Working Paper Summaries
Show or Tell? Improving Agent Decision Making in a Tanzanian Mobile Money Field Experiment
Mobile money is popular in developing economies but many agents do not maintain proper inventory levels. This paper, based on a study of 4,771 agents in Tanzania, shows how training and ongoing guidance improve their inventory management. Agents who get in-person training and explicit inventory recommendations tend to stock out less.
- 14 Jun 2018
- Cold Call Podcast
How Chase Sapphire Made Credit Cool for Millennials
The Chase Sapphire Reserve card was one of the hottest product launches in 2016. But what would be its next act, now that the introductory offer of 100,000 points was reduced? Shelle Santana discusses JP Morgan's strategy. Open for comment; Comment(s) posted.
- 26 Apr 2018
- Cold Call Podcast
Why JPMorgan Chase Is Investing Millions in Detroit
JPMorgan Chase is making extensive investments into the revitalization of Detroit. What does it expect in return? Professor Joseph Bower and JP Morgan executive Peter Scher discuss the challenges and rewards of partnering with cities in this podcast. Open for comment; Comment(s) posted.
- 02 Apr 2018
- Research & Ideas
Is 'Gut Feel' a Good Reason to Invest in a Startup?
Most investments in startups should never be made, at least when using by-the-numbers reasoning. But funded they are. Laura Huang believes investors use gut instinct to manage that risk. Open for comment; Comment(s) posted.
Investor Lawsuits Against Auditors Are Falling, and That's Bad News for Capital Markets
It's becoming more difficult for investors to sue corporate auditors. The result? A weakening of trust in US capital markets, says Suraj Srinivasan. Open for comment; Comment(s) posted.