‘It’s Time to Discuss Our Projects’

From November 18th-19th the First International Moscow Finance Conference, organized by the HSE International College of Economics and Finance, took place at the Higher School of Economics. Carsten Sprenger, Head of the HSE International Laboratory of Financial Economics, told us about the conference participants, the programme and his impressions of the event.

— Your laboratory was initiator and organizer of the conference. Why did you feel it was time to organize the first ICEF conference?

— The HSE International Laboratory of Financial Economics was created a year and a half ago, and we decided it was time to analyze what we have managed to do and to discuss our projects with our international colleagues. Moreover, we believe that such conferences should be held annually.

Prominent economists and finance experts were invited to the conference. One of them, Yuly Sannikov, Professor of Economics at Princeton University (USA), gave a remarkable lecture on how to model a financial crisis through the use of macroeconomic models. Another brilliant presentation was made by Arnoud Boot, Professor at the University of Amsterdam, on the problems of the Eurozone, and in particular, why they are rooted in the banking sector crisis.

The programme of the conference was very intensive: 18 presentations were delivered during the two days of the conference, covering many different themes: corporate finance, risk management, pricing of financial assets, investment, the consequences of the default, and so on. I believe that everybody attending left with not only plenty of new information, but also a renewed motivation to go home and conduct further research in their areas.

— I understand that there was an exchange of information and research results. But were there appropriate discussions in the specific areas?

— The format of the conference involved a discussant for each speaker who carefully read the paper in advance and suggested a 10-minute review with his comments and critical remarks. The discussions developed on the basis of the discussants’ speeches. Unfortunately, as always, we ran out of time to discuss the papers in detail, and that’s why the debates continued during coffee breaks and lunches.

The most active discussion was provoked by Prof. Boot’s open lecture, his understanding and evaluation of the general picture of the banking crisis in Europe. Colleagues expressed varied views on the nature and reasons of the crisis. There was a particularly interesting exchange between Arnoud Boot and Dimitrios Tsomocos, Professor at the University of Oxford Said Business School, who insisted on another view of the reasons of the crisis in the Eurozone.

— Who of the laboratory staff spoke at the event?

— Almost all members of the laboratory presented their papers, and that’s why the conference programme turned out to be so intense. Each presentation was commented on by colleagues, not only in terms of the contents of the analyzed problem, but also on potential ways to deepen the current research work with further publication of its results in leading journals.

Christian Julliard, Academic Supervisor of the Laboratory and Professor at the London School of Economics and Political Science (LSE), spoke about the application of network theory in the interbank market, when banks provide data on liquidity but at the same time face a systemic risk. Sergey Gelman, Senior Research Fellow at the Laboratory, presented his work on option pricing and responded to some important and useful comments from Mikhail Chernov, Professor at the LSE. The paper by Vladimir Sokolov on repo auctions by the Federal Reserve Bank was commented on by Prof. Diego Garcia from the University of North Carolina (USA). The laboratory members also had the opportunity to discuss papers by their fellow researchers.

For us, the most important task was to attract some world-class specialists to Moscow and to create a new discussion platform for financial economics. I believe that we have successfully done this.

— Please tell us more about the Laboratory’s immediate plans.

— Firstly, we shall continue working on our current projects and shall launch some new research projects with the help of researchers from the New Economic School (NES). In Moscow, which is short of specialists in financial economics, it is necessary to unite our efforts and carry out joint research projects, seminars, presentations and regular meetings with prominent economists and exchange ideas.

In a year, in November 2012, we shall again hold an international conference, for which we need to start preparing in the near future. Academicians are very busy people, and events need to be planned well in advance

— In addition to heading the laboratory, you carry out your own research work. What are you currently studying?

— My area of research interests is corporate finance and corporate governance. I am involved in different projects, both empirical and theoretical. One of them is about Russian unit funds compared with foreign ones which also invest in the Russian economy. Another project is related to the study of the process of the nationalization of private companies, such as Sibneft (now Gazprom Neft), VSMPO-Avisma or YUKOS (the major part of today’s Rosneft). I am interested in how financial performance changes in companies following their acquisition by the state.

— Heads of many research laboratories often complain that they lack clear heads among the young staff. What is your situation with young researchers who will be able to join the laboratory staff in future?

— We work mostly with undergraduate and master’s students of the HSE International College of Economics and Finance (ICEF). And it is true that sometimes it is hard to find motivated people who are willing to participate in research work. The tasks which are usually carried out by students – searching for data and its processing – are usually mechanical and rarely exciting. Nevertheless, such tasks should be approached responsibly, since any mistakes can affect the results of the whole research. I can say that generally we are satisfied with our work with students, and they of course make some use of our cooperation: they write undergraduate and master’s theses on the topics of the laboratory’s studies. The young staff of the laboratory are constantly changing. ICEF students who are interested in research work, go on to enter PhD programmes of prestigious international universities, since currently, unfortunately, we cannot recommend a postgraduate programme in economics in Russia. But we truly believe that in the next few years we will reach a ‘critical mass’ of Russian economists who have received a quality education abroad and come back home. Then we shall be able to create a postgraduate programme in financial economics here, in Russia.

Valentina Gruzintseva, HSE News Service

Photos by Nikita Benzoruk