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Full-Text Articles in Finance and Financial Management

Watch The Vote: Avoiding Undesirable Zero-Sum Outcomes, Knowledge@Smu Apr 2010

Watch The Vote: Avoiding Undesirable Zero-Sum Outcomes, Knowledge@Smu

Knowledge@SMU

Luxury watches often invoke a lot of debate amongst its aficionados. After the great lengths to which people go to, to collect, study, appraise and critique these mobile mechanical clocks, it is no surprise that they feel very strongly about their picks. Decisions made by prestigious bodies, such as the Grand Prix d’Horlogerie, are hence quite delicate. People's money, ego, and pride are at stake. So picking the winner that will keep the majority satisfied is crucial, yet quite difficult to do. Drawing comparisons to political election outcomes, SMU Economics professor Massimiliano Landi explores a new voting system to address …


Rewriting The World Order: China's Footprint On The Credit Crisis And International Affairs, Knowledge@Smu Mar 2010

Rewriting The World Order: China's Footprint On The Credit Crisis And International Affairs, Knowledge@Smu

Knowledge@SMU

Tired of reading conventional theories to what caused the recent financial crisis? How about a theory that places the blame on China, for a change? Giles Chance, author of “China and the Credit Crisis”, dances between the fine lines as he gives a fresh spin on the crisis, blind Western policymakers, a global currency and the world order that is to come as the "China effect" dominates familiar Western models of capitalism, politics and diplomacy.


With The Financial Crisis Over, Banks Are Hiring Again – But With A Different Job Description, Knowledge@Smu Feb 2010

With The Financial Crisis Over, Banks Are Hiring Again – But With A Different Job Description, Knowledge@Smu

Knowledge@SMU

The massive blood-letting that was supposed to happen with the recent financial crisis went by, without much of hoopla – at least in this part of the world – and many financial institutions are hiring again. However, with new market reforms, human resource managers are mulling over job descriptions. The mindset to maximise profits may be important, but according to the experts, professionals in the industry will be expected to bring more onto the table – to be accountable to a wider circle of stakeholders and to demonstrate a different set of values.


Warding Off Longevity Risks: Ensuring Sustainable Income For Retirement, Knowledge@Smu Feb 2010

Warding Off Longevity Risks: Ensuring Sustainable Income For Retirement, Knowledge@Smu

Knowledge@SMU

Greying populations are no longer a challenge reserved just for developed economies. The “silver tsunami” is starting to make its way towards developing nations too. But are governments, insurance companies, banks and individuals preparing themselves sufficiently? Buying annuities is one means to which people can plan for their retirement needs. Yet, take-up rates remain low. As the "tsunami" approaches, should regulators take forceful action to kick start the take-up of such instruments to prepare their economies for the impending economic mayhem?


An Economist's Take On The Opportunities And Threats That Lie Ahead For Asia, Knowledge@Smu Feb 2010

An Economist's Take On The Opportunities And Threats That Lie Ahead For Asia, Knowledge@Smu

Knowledge@SMU

Say you have the ability to foresee the ups and downs of the economy; what would you do with that power? Stephen Roach's answer: Become a celebrated economist, columnist and author! His latest book, The Next Asia, is a 2006 to 2009 greatest hits collection of essays on what, he believes, are the region's shortfalls and opportunities. There is plenty to chew upon – from what Roach believes are the factors that led to the recent financial crisis to the various issues that will plague the continent's rapidly developing economies.


Corporate Governance In China: No Quick Fix, No Fixed Solution, Knowledge@Smu Dec 2009

Corporate Governance In China: No Quick Fix, No Fixed Solution, Knowledge@Smu

Knowledge@SMU

China offers a multitude of business opportunities, but international investors often find themselves stumped with a range of issues, many of which boil down to the country's distinct system of corporate governance. Here, the lines between interests and relationships are less clear-cut, and links to the government seem to serve as a proxy to accountability. This is a system that exists for a reason, said TJ Wong at SMU's Ho Bee Professorship in Chinese Economy and Business lecture series. However, foreign investors, used to international norms of transparency, are calling this into question.


Monitoring State-Owned Versus State-Controlled Enterprises, Knowledge@Smu Oct 2009

Monitoring State-Owned Versus State-Controlled Enterprises, Knowledge@Smu

Knowledge@SMU

What’s the best way to monitor listed Chinese companies effectively? Should the Chinese government introduce more stringent corporate governance regulations to keep managers on their toes? Forget it. According to a research study by SMU accounting professor Wang Jiwei, the government is better off ditching its little black book of corporate governance reform and focusing on other ways to get results. --------------------------------------------------------------------------------


Following The Financial Crisis: Risk And Opportunities For Singapore, Knowledge@Smu Sep 2009

Following The Financial Crisis: Risk And Opportunities For Singapore, Knowledge@Smu

Knowledge@SMU

Asian economies are showing signs of recovery, and the stock markets have rebounded, leading to optimism that the worst of the economic crisis is over. However, few are expecting a quick return to the boom years, for weakness still persists in major economies while uncertainties remain in others. Nevertheless, for those Singapore-based regional financial industry players speaking at a recent seminar organised by the Sim Kee Boon Institute of Financial Economics, they are picking up lessons learned, seeing beyond the near-term worries, and finding growth opportunities.


Leave Some Breathing Room For Optimal Value Creation In Asian Family-Owned Firms, Knowledge@Smu Sep 2009

Leave Some Breathing Room For Optimal Value Creation In Asian Family-Owned Firms, Knowledge@Smu

Knowledge@SMU

Corporate governance, via the active monitoring of a company’s management by its board of directors, is an accepted practice. For publicly-listed companies controlled by families, the general perception is independent directors should actively take up the mantle of watching out for the interests and rights of minority shareholders. But, is there a possibility whereby over-zealous monitoring might crimp the growth of these family-run companies, thus, doing more harm than good? According to a new study: Yes, it does!


An Elusive Search For The Holy Grail Via Japan’S Lost Decade, Knowledge@Smu May 2009

An Elusive Search For The Holy Grail Via Japan’S Lost Decade, Knowledge@Smu

Knowledge@SMU

Why did the Wall Street crash of October 1929 cause the global economy to decline and stagnate over a long time? Till today, macroeconomists are still trying to answer what Ben Bernanke describes as the “Holy Grail” – an enlightened understanding of what went wrong. Richard Koo, author of “The Holy Grail of Macroeconomics: Lessons from Japan’s Great Recession”, attempts an explanation with the “balance sheet recession” concept, based on his observations in Japan, where companies try to pay down their debt on time, if not earlier.


Longevity The Ultimate Risk For Ageing Populations, Says John Piggott, Knowledge@Smu Feb 2009

Longevity The Ultimate Risk For Ageing Populations, Says John Piggott, Knowledge@Smu

Knowledge@SMU

The proportion of elderly people in the population is increasing with Japan leading the field globally. The long-run effect is to put an increased burden on the young to support them. John Piggott, research dean at the Australian School of Business, University of New South Wales, spoke on longevity as the ultimate risk in the 21st Century at a seminar organised by the Sim Kee Boon Institute for Financial Economics at the Singapore Management University at the end of last year.


Financial Risk Management: Lessons From The Current Crisis ... So Far, Knowledge@Smu Dec 2008

Financial Risk Management: Lessons From The Current Crisis ... So Far, Knowledge@Smu

Knowledge@SMU

The current economic recovery looks long and difficult, and makes providing for an ageing population an even greater challenge. Will economies rebound to provide for the health care needs of retirees? At a conference organised in November 2008 by the Sim Kee Boon Institute’s newly launched Center for Silver Security at the Singapore Management University, Todd Groome of the International Monetary Fund spoke on how the ongoing financial crisis could shape retirement risk.


Thierry Apoteker On The Threat Of Global Stagflation, Knowledge@Smu Nov 2008

Thierry Apoteker On The Threat Of Global Stagflation, Knowledge@Smu

Knowledge@SMU

Managing director Thierry Apoteker and his team at French company T-A-C (Thierry Apoteker Consulting) have correctly predicted many of the economic shocks that the world has seen in the past three months. In a recent presentation hosted by the International Trading Institute, Singapore Management University, Apoteker made a convincing case for worldwide inflation and recession, known as stagflation.


Fair-Value Accounting Provides Much Needed Transparency In Dislocated Markets, Knowledge@Smu Nov 2008

Fair-Value Accounting Provides Much Needed Transparency In Dislocated Markets, Knowledge@Smu

Knowledge@SMU

In the current global financial turmoil, more transparency is needed, not less, say Singapore Management University professor of accounting Andrew Lee and accounting lecturer Lim Chu Yeong. While some critics argue that fair-value accounting is partly to blame and should be suspended, in a recent commentary Lee and Lim made the case for fair-value accounting as having an important role to play in providing timely and relevant information to investors.


Retail Investors And Structured Products: A Case Of 'Buyer Beware'!, Knowledge@Smu Nov 2008

Retail Investors And Structured Products: A Case Of 'Buyer Beware'!, Knowledge@Smu

Knowledge@SMU

Across the globe, buyers of structured products linked to Lehman Brothers have seen their investments wiped out. In Singapore, the MAS (Monetary Authority of Singapore) has appointed an independent committee to oversee the review and resolution of customer complaints. Tan Chong Hui, professor of quantitative finance at Singapore Management University, has this advice especially for retail investors of structured products: caveat emptor or ‘buyer beware’.


Money Largely Accounts For Increased Unemployment During Stagflation, Shows A Recent Study, Knowledge@Smu Oct 2008

Money Largely Accounts For Increased Unemployment During Stagflation, Shows A Recent Study, Knowledge@Smu

Knowledge@SMU

Is there a relation between money, measured by inflation or interest rates, and unemployment? According to Aleksander Berensten, Guido Menzio and Randall Wright -- co-authors of a recent paper on “Inflation and Unemployment in the Long Run” -- there is a strong positive relation. Wright, who is professor of economics at Wharton, presented a seminar based on their paper at the Singapore Management University’s School of Economics.


Digital Storytelling Engages Tech-Savvy Accounting Students, Knowledge@Smu Sep 2008

Digital Storytelling Engages Tech-Savvy Accounting Students, Knowledge@Smu

Knowledge@SMU

Singapore has ambitions to become a global hub for `digital economy’ services. In September 2008, Singapore’s National Library Board, National Book Development Council and The Arts House are hosting the inaugural Asian Digital Storytelling Congress, Beyond Words 2008. Themin Suwardy, accountancy professor and associate dean at Singapore Management University, is one of the key speakers at the congress. His topic: Academic Learning through Digital Storytelling.


The Asian Banker: From Trade Journal To Industry Benchmark Setter, Knowledge@Smu Aug 2008

The Asian Banker: From Trade Journal To Industry Benchmark Setter, Knowledge@Smu

Knowledge@SMU

Emmanuel Daniel is founding president and editor-in-chief of The Asian Banker, one of the region’s leading consultancies in financial services research, benchmarking and intelligence. A trade publisher should provide leadership and not be a follower of the industry that it covers, believes Daniel, who spoke recently at a Masters Seminar on benchmarking and measuring IT performance in banks organised by the School of Information Systems, Singapore Management University.


Herd Behaviour In Financial Markets: Do Traders Follow The Crowd Or Do Their Own Thing?, Knowledge@Smu Jul 2008

Herd Behaviour In Financial Markets: Do Traders Follow The Crowd Or Do Their Own Thing?, Knowledge@Smu

Knowledge@SMU

In financial markets, what part of a trader’s action is simply “following the crowd” or herding, and how much is based on the trader’s own information? Herding has been shown to decrease the stability and efficiency of markets, hence the interest in these behaviours. Marco Cipriani (Asian Division, IMF Institute) and Antonio Guarino (University College London) studied herd behaviour in a laboratory setting involving financial market professionals. Cipriani presented a co-authored IMF working paper on herd behaviour in financial markets at a recent seminar at the Singapore Management University. --------------------------------------------------------------------------------


Can Monetary Policy Help To Stabilise Asset Prices?, Knowledge@Smu Jun 2008

Can Monetary Policy Help To Stabilise Asset Prices?, Knowledge@Smu

Knowledge@SMU

Should central banks use monetary policy to stabilise asset prices, particularly home and equity prices? Stefan Gerlach, professor of monetary economics, Johann Wolfgang Goethe University of Frankfurt, points out that no central bank has had lowering home prices as one of its policy goals. Gerlach spoke recently at an Economics and Statistics Seminar at the Singapore Management University on how residential property and equity prices, inflation and economic activity responded to monetary policy shocks in 17 countries from 1986 to 2006.


Retirement Planning: Most People Don’T Know How Nor Even Think About It, Knowledge@Smu Apr 2008

Retirement Planning: Most People Don’T Know How Nor Even Think About It, Knowledge@Smu

Knowledge@SMU

Worldwide, individuals are being asked to make more of their own savings and investment decisions, especially for retirement. In the US and Europe, for example, company-managed pension plans are giving way to those where employees are in charge of their own retirement money. In Singapore too, the government is encouraging individuals to take a more active role in their own retirement planning. Research by Wharton insurance and risk management professor Olivia Mitchell and Singapore Management University finance professor Benedict Koh shows, however, that people are not well-equipped to handle such investment decisions.


Measuring Economic Value Added (Eva): How Corporate Governance Works For Shareholders, Knowledge@Smu Apr 2008

Measuring Economic Value Added (Eva): How Corporate Governance Works For Shareholders, Knowledge@Smu

Knowledge@SMU

Economic Value Added (EVA)” is a registered trademark of Stern Stewart & Co, a consulting firm which implements the EVA concept for large companies. Joel M. Stern, managing partner of Stern Stewart since its inception, is a recognised authority on corporate performance measurement and a pioneer and proponent of shareholder value. Stern recently delivered the Shaw Foundation Distinguished Faculty Lecture at the Singapore Management University on how to make corporate governance work for shareholders. This article explains why EVA as a way of measuring a firm's performance matters.


Is Direct Method Cash Flow Reporting Better At Predicting Future Performance?, Knowledge@Smu Nov 2007

Is Direct Method Cash Flow Reporting Better At Predicting Future Performance?, Knowledge@Smu

Knowledge@SMU

“Cash is king” goes the saying. Even companies enjoying brisk business have been known to fail because of unhealthy cash flows. The accounting profession is split over the benefits of the direct method (DM) versus the indirect method (IM) of preparing cash flow reports. In a study of over 100 US-based companies which used direct cash flow statements, Singapore Management University accounting professor Yoonseok Zang shows conclusively that the direct method does better at predicting future performance and earnings. --------------------------------------------------------------------------------


Top Performing Hedge Funds: Does Geography Make A Difference?, Knowledge@Smu Oct 2007

Top Performing Hedge Funds: Does Geography Make A Difference?, Knowledge@Smu

Knowledge@SMU

Do hedge funds earn above-average returns? Is there a way to identify these top performers? Where hedge funds are located makes the difference, according to Singapore Management University finance professor Melvyn Teo, who is also director of the university’s BNP Paribas Hedge Fund Centre. Teo puts forward evidence for the hypothesis that locally-managed hedge funds are better able to monitor their investments and, therefore, generate superior returns.


Minimum Profitability Ruling A Boon Or Bane? Some Lessons From China, Knowledge@Smu Oct 2007

Minimum Profitability Ruling A Boon Or Bane? Some Lessons From China, Knowledge@Smu

Knowledge@SMU

China’s Securities Regulatory Commission (CSRC) stands out in its approach to tighten restrictions for listed companies wanting to initiate rights issues or seasoned equity offerings (SEOs). The country’s experience, relevant to other emerging markets, is the subject of a research paper published recently in the International Journal of Accounting, co-authored by Kevin C.W. Chen, accounting professor at the Hong Kong University of Science and Technology and Singapore Management University accounting professor Jiwei Wang. --------------------------------------------------------------------------------


Should China Keep Its Dollar Peg? Some Parallels From Japan, Knowledge@Smu Sep 2007

Should China Keep Its Dollar Peg? Some Parallels From Japan, Knowledge@Smu

Knowledge@SMU

At a recent Singapore Management University School of Economics Distinguished Lecture, Stanford University international economics professor Ronald I. McKinnon warned of a possible ‘lost decade’ of falling price levels and undesirably low interest rates in China, similar to those experienced by Japan in the 1990s. McKinnon draws parallels between Japan in the late 1980s and present day China in his paper entitled “Why China Should Keep its Exchange Rate Pegged to the Dollar: A Historical Perspective from Japan”. --------------------------------------------------------------------------------


Singapore’S Cpf Retirement Scheme: Delivering More Bang For The Buck, Knowledge@Smu Aug 2007

Singapore’S Cpf Retirement Scheme: Delivering More Bang For The Buck, Knowledge@Smu

Knowledge@SMU

Singapore’s Central Provident Fund (CPF) is one of Asia’s oldest and best known defined contribution retirement schemes. As the country rapidly ages, government policymakers are paying close attention to whether its citizens and residents are saving enough for retirement. Benedict Koh, Olivia Mitchell and associates recently prepared two working papers which examine the CPF Investment Scheme (CPFIS) as well as its potential to adequately support members in retirement.


Managing Retirement Risk In An Ageing World: The Global Picture, Knowledge@Smu Jul 2007

Managing Retirement Risk In An Ageing World: The Global Picture, Knowledge@Smu

Knowledge@SMU

According to HSBC’s 2007 global retirement study, most retirees in their 60s and 70s are living healthy, happy and productive lives. However, as the world rapidly ages, most pre-retirees are surprisingly unconcerned about how they will cope in their retirement. In Part 1 of a 2-part article, Olivia Mitchell, Wharton professor of insurance and risk management, who is also a chaired professor at Singapore Management University, cautions that these people might be living with a false sense of security, and could face a rude awakening when it is too late to do anything about it.


Exploring Steps To Create A Regional Monetary Unit For Asean+3, Knowledge@Smu May 2007

Exploring Steps To Create A Regional Monetary Unit For Asean+3, Knowledge@Smu

Knowledge@SMU

As part of an initiative to move towards greater financial stability in the Asian region, a Regional Monetary Unit is being proposed for the ASEAN+3 nations. These include China, Indonesia, Japan, South Korea, Malaysia, Philippines, Singapore and Thailand. Other countries can be added in the future. Professors Hwee Kwan Chow, Peter N. Kriz, Roberto S. Mariano and Augustine H. H. Tan, from the School of Economics at Singapore Management University, offer their views on the need for a RMU, what its benefits are and how it would work.


China Forges Ahead On Financial Reform – At Its Own Pace, With Its Own Rules, Knowledge@Smu Apr 2007

China Forges Ahead On Financial Reform – At Its Own Pace, With Its Own Rules, Knowledge@Smu

Knowledge@SMU

China’s fast-evolving financial industry, like the country itself, defies the type of easy, sound bite-friendly synopses that foreign investors might like. It’s often unclear exactly what factors are stoking China’s remarkable economic growth engine. Or, as Winston Wenyan Ma, an investment banker who most recently worked for J.P. Morgan in New York and is the author of Investing in China – New Opportunities in a Transforming Stock Market, puts it: “The Chinese financial industry is a very complex story.” Speaking at the recent Wharton China Business Forum in Philadelphia, Ma moderated a panel on financial reform – a key ingredient …