Lenders in charge: The role of creditors in corporate governance Largely overlooked, creditors exert more control over companies than previously thought. Should companies try and insulate themselves from such influence?
When a company sells securities whether it is equity or debt, part of what it is selling is some control over the firm. The traditional view of corporate governance, however, is that shareholders main... Read More
Lessons from the new financial crisis Contrary to all beliefs that the financial crisis was coming to an end, it managed to surprise us yet once again only three years later. Who are we going to blame this time?
The previous crisis of 2008 was blamed on greedy bankers, driven by bonuses tied to short term profits, trying to sell complicated products that people could not understand. Other culprits were the ra... Read More
Do the derivatives markets make commodity prices more volatile? Prof. Sheridan Titman, faculty of finance at the university of texas at austin looks into the dynamics of the derivative markets and explains how betting in these markets actually impacts commodity prices.
Again, the football analogy is useful, and the relevant question is whether the betting odds on a game can influence the players. If a player sees that his team is a 30 point favorite, then the ... Read More