New banking and investment business models to navigate the post-financial crisis environment
The financial crisis of 2007-2008 has discredited business models in the banking and fund management industries. In The Future of Finance, Moorad Choudhry and Gino Landuyt argue that banks must realign their business models, implying a lower return-on-equity; diversifying their funding sources; and increasing liquidity reserves. On the investment side, the authors discuss how diversification did not reduce risk, but rather amplified it, and failed to stabilize returns. The authors conclude that the clear lesson from the crisis is to know one’s risk. A lesson that is best served by concentrating on assets and sectors that you understand.
Examines the weaknesses in the business models of many institutions, as well as the theoretical foundation for professionals in the field of finance
Identifies the shortcomings of Modern Portfolio Theory
Addresses how investment managers can find new strategies for creating “alpha” and why they need to re-vamp their fee structures
Filled with in-depth insights and practical advice, The Future of Finance will provide bankers and investment managers with a guide to realigning their businesses in order to prosper in the post-crisis financial markets.
Editorial Reviews
From the Inside Flap
Financial markets have always promised, and often delivered, prosperity. But, during the last decade, the structure and behavior of financial markets themselves helped create the conditions for an economic implosion that resulted in a banking crisis, recession, and wholesale loss of investor confidence.
While recent events have renewed calls on the need for a paradigm shift in both the investment and banking model, another clear lesson from the crisis is to “know one’s risk,” and that is best served by appreciating fully the nature of the markets in which finance operates.
The Future of Finance looks beyond the headlines and media hype to present a full and accessible analysis of the factors leading to the crash of 2007 and the banking crisis of 2008, as well as the interaction between these factors. In Part II of the book, the authors present practical recommendations for a revised approach to banking and principles of investment, which if followed will help to produce a more sustainable level of economic prosperity.
While every possible option is impossible to discuss, the measures described throughout these pages should form part of a logical, unbiased review of strategy by both banks and investors.
From the Back Cover
Financial markets have always promised, and often delivered, prosperity. But, during the last decade, the structure and behavior of financial markets themselves helped create the conditions for an economic implosion that resulted in a banking crisis, recession, and wholesale loss of investor confidence.
While recent events have renewed calls on the need for a paradigm shift in both the investment and banking model, another clear lesson from the crisis is to “know one’s risk,” and that is best served by appreciating fully the nature of the markets in which finance operates.
The Future of Finance looks beyond the headlines and media hype to present a full and accessible analysis of the factors leading to the crash of 2007 and the banking crisis of 2008, as well as the interaction between these factors. In Part II of the book, the authors present practical recommendations for a revised approach to banking and principles of investment, which if followed will help to produce a more sustainable level of economic prosperity.
While every possible option is impossible to discuss, the measures described throughout these pages should form part of a logical, unbiased review of strategy by both banks and investors.
About the Author
MOORAD CHOUDHRY has over twenty-one years experience in investment banking and was latterly head of treasury at Europe Arab Bank. He was previously head of treasury at KBC Financial Products and vice president in structured finance services at JPMorgan Chase Bank. Dr. Choudhry is Visiting Professor at the Department of Economics, London Metropolitan University, and Senior Research Fellow at the ICMA Centre, University of Reading. He is a Fellow of the ifs-School of Finance and a Fellow of the Chartered Institute for Securities and Investment. He is on the Editorial Board of the Journal of Structured Finance and the Editorial Advisory Board of American Securitization.
GINO LANDUYTis Head of Sales at Conduit Capital in London. Prior to that, he was head of institutional structured sales at ING Bank in Brussels, and worked with KBC Bank N.V. in their Brussels, Frankfurt, New York, and London offices. Landuyt has an MA in applied economic sciences from the State University of Antwerp and an MBA from the Catholic University of Antwerp.
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