Javier Gómez Biscarri, Germán López Espinosa
Pricing models, an important tool in asset allocation worldwide, perform poorly at an international level compared to domestic versions. However, if the accounting information used followed the same system across borders, could this underperformance be reversed? Professors Javier Gómez Biscarri of IESE and Germán López Espinosa of the University of Navarra test this question on a well-known pricing model. Their answers are reassuring.
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Alberto Ribera, Florencia Sortheix
Strong internal controls are expected in companies of high risk, such as investment banking. The staggering 4.9 billion euro loss of Société Générale, supposedly at the hands of a rogue trader, is one of the most incredulous recent cases. How could managers not know of their own trader's positions or methods? IESE Prof. Alberto Ribera examines questions of complicity, corporate culture and risk management in this extraordinary case that rocked the banking world.
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Pascual Berrone
What is behind the current global financial crisis? IESE Prof. Pascual Berrone points the finger at bad corporate governance practices. Accepted incentive schemes for top managers - such as golden parachutes that effectively reward failure, and stock options that led to excessive risk-taking in subprime mortgage securities - may be the ultimate culprit of the crisis.
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