V O LU ME 3 2

N UMB ER 4
FA L L 2 0 2 0

Journal of

APPLIED
CORPORATE FINANCE
I N THIS I SSU E:

Public 8 Rethinking Macro Measurement

James Sweeney, Chief Economist, Credit Suisse

Finance and 17 The First Modern Financial Crises: The South Sea and Mississippi
Bubbles in Historical Perspective

Central Banks
Robert F. Bruner, University of Virginia; and Scott C. Miller, Yale University

34 Convergence and Reversion: China’s Banking System at 70

Carl Walter

44 Apocalypse Averted: The COVID-Caused Liquidity Trap, Dodd-Frank,

and the Fed
Craig Pirrong, University of Houston

49 The Poverty of Monetarism

Patrick Bolton, Columbia University

68 Columbia Business School Roundtable on Broken Models of Public Finance

Panelists: Jared Bernstein, Center for Budget and Policy Priorities; and Paul Kazarian,
Japonica Partners. Moderated by Shiva Rajgopal, Columbia University

82 Columbia Business School Roundtable on The Fed’s Response to the

Global Financial Crisis—and Now the Pandemic
Panelists: Frederic Mishkin and Patricia Mosser, Columbia University. Moderated by Kate Davidson,
The Wall Street Journal

90 The Euro @ 20: How Economic and Financial “Asymmetries”

Marred the Promise of the Single Currency
George Alogoskoufis, Athens University of Economics and Business; and Laurent Jacque,
Tufts University

105 The Benefits of Buying Distressed Assets

Jean-Marie Meier, University of Texas at Dallas; and Henri Servaes, London Business School,
CEPR, and ECGI

117 Using ESG to Enhance Fixed-Income Returns: The Case of Inherent Group
Nikhil Mirchandani and Chelsea Rossetti, Inherent Group

127 The Economic (Not Literary) Offenses of Michael Lewis:

The Case of The Big Short and the Global Financial Crisis
Don Chew, Journal of Applied Corporate Finance
Apocalypse Averted: The COVID-Caused Liquidity
Trap, Dodd-Frank, and the Fed
by Craig Pirrong, University of Houston

I
n an article published in this journal eight years ago called “Clearing and Collateral

Mandates: The New Liquidity Trap?,” I challenged the conventional wisdom that a

major feature of the Dodd-Frank Act—the one that required clearing of most over-the-counter

(“OTC”) derivatives and collateralization of those that cannot be cleared—would materially

reduce the risk of another financial crisis. Indeed, I argued that such measures could actually

increase systemic risk. The gravamen of my argument was that Dodd-Frank, in its attempt to

reduce credit risk in derivatives markets, would end up increasing liquidity risk. That is, the

Act’s clearing and collateral mandates would tend to increase demands for funding liquidity

during times of market stress. Given that historically most financial crises have been at root

liquidity crises, this substitution of liquidity risk for credit risk was deeply problematic.

In March 2020, the market dislocations caused by the Beware the Ides of March
COVID-19 virus provided the first major test of the finan- The rapid spread of the COVID-19 virus, and the widespread fear
cial infrastructure that had been erected in the aftermath that it could rival the Spanish Influenza of 1918-1919, caused a
of Dodd-Frank. After a few fraught days of this COVID- large change in asset prices. In the almost four-week period from
apocalypse, the system stabilized, so apparently the test was February 19 to March 16, the S&P 500 index declined almost
passed. exactly 1,000 points—a nearly 30% decline. At the same time,
But some healthy skepticism is in order. For one the volatility of the S&P 500 (measured by the VIX volatility
thing, the most pronounced symptoms of an incipient index) more than quadrupled, from 14.4% to 72%.
crisis were directly attributable to the credit-risk-reducing But the market for U.S. Treasury securities sent even more
and liquidity-risk-increasing features of the Dodd-Frank ominous signals. The yield on 10-year Treasury notes declined
reforms—margins (collateral) on derivatives. Margins from 1.56% on February 19 to 0.54% on March 9, but then
and liquidity played a central role in mid-March’s market spiked up to 1.18% on March 18 before dropping again to
disruptions. For another, Federal Reserve intervention in 0.62% on April 3. And these gyrations in Treasury rates were
the form of massive injections of liquidity, rather than the accompanied by anomalous movements in the spreads, or differ-
autonomous operation of market infrastructure, is what ences, between various interest rates. The spread between the
stemmed the crisis. The episode proves, therefore, just how Overnight Index Swap rate and the yield on 30-year Treasuries
dependent the financial system remains on the prompt and spiked from around 45 to 120 basis points.1 At the same time,
effective intervention of the lender of last resort. It’s almost
as if Dodd-Frank never happened, or doesn’t matter—
1 Andreas Schrimpf, Hyun Song Shin, and Vladyslav Sushko, “Leverage and
except to the extent it exacerbated the liquidity strains that Margin Spirals in Fixed Income Markets during the COVID-19 Crisis,” BIS Bulletin 2
the Fed eased through its massive intervention. (2020).

44 Journal of Applied Corporate Finance • Volume 32 Number 4 Fall 2020

the spread between the 30-year swap yield and 30-year Treasur- The rally in Treasury futures prices was larger than the rally
ies fell by more than 30 basis points. Both of these moves went in the prices of the underlying Treasury securities. Thanks
far beyond the normal variation in these spreads. to the margining process on futures contracts, basis traders
The most acute price dislocations were between the had to pay out their losses on their short futures positions in
prices of Treasury securities and the widely traded futures cash on the day they were incurred. But because the traders did
on Treasury securities. The spread between the repurchase not realize commensurate gains on their positions in Treasury
(“repo”) rate implied by the prices of Treasury securities securities, they now faced higher costs to borrow the differ-
and the futures thereon and the actual repo rate went from ence. As a result of the deteriorating economics of the strategy,
essentially zero in late February to as high as 8 basis points some traders exited their losing positions, buying futures and
in mid-March. Although 8 basis points might seem like a selling Treasuries. The resulting selling and buying pressure
small number, given that the difference usually varies within caused further divergences between futures and cash prices,
fractions of a basis point around zero, it actually represents leading to further losses on basis trades—which intensified
a massive pricing anomaly. the flight from the trade.
And, indeed, this anomaly signaled an acute market disloca- In fact, the purchases of futures and sales of cash
tion—one that provided a major impetus for Fed intervention. Treasuries by those exiting basis trades had a very large
Further, the very mechanism that advocates of Dodd-Frank impact on prices because the market liquidity in these
claimed would reduce systemic risk—the margining of deriva- instruments dried up. Whereas the “depth” of the market—
tives—played a major role in this dislocation. as reflected in the number of contracts bid or offered—had
A blowup in a particular trading strategy—“basis been between 500 and 1,000 contracts prior to mid-Febru-
trading”—was primarily responsible for this dislocation. ary, it had fallen to a handful of contracts by early March.
Basis trading—in particular, “buying the basis”—consists Thus, there were few willing sellers to absorb the contracts
of the following: (1) buying a Treasury security (such as a that fleeing basis traders wanted to buy, which meant that
30-year Treasury bond), (2) borrowing to finance this purchase their sales had unusually large impacts on prices—which
(usually through the repo market), and (3) selling a futures in turn increased losses on basis trades even more, sparking
contract on the same security (like the 30-year Treasury bond yet more flight. Wash, rinse, repeat.
futures traded on the Chicago Board of Trade). If the differ- At this point, and making matters worse, another mecha-
ence between the futures price and the price of the underlying nism that I emphasized in Liquidity Trap kicked in—namely,
Treasury exceeds the cost of funding the purchase of the clearinghouses. To the fair-haired children of Dodd-Frank,
Treasury, this strategy earns a low-risk profit—low risk because clearinghouses are intended to protect the safety of the finan-
the expected “convergence” of futures prices and cash prices cial system by setting initial margins at high enough levels
makes the sale of futures a near perfect hedge for the purchase to make it highly unlikely that the clearinghouse will suffer
of the Treasury. a loss if a trader defaults.3 That is, clearinghouses set initial
But if this trade is usually a low-risk strategy, it is a prover- margins to all but eliminate the credit risk they face from
bial case of picking up nickels in front of a steamroller. Usually market participants. The problem with this, however, is that
the strategy makes a very small profit, with little risk of loss. high margins exacerbate other risks, most notably liquidity
But from time to time, there are episodes in which it loses risk and “fire sale” risk, that further destabilize markets.
large amounts of money.2 To see why, note that the risks of default, all else equal,
Why do such losses occur? The success of the strategy rise when volatility increases. Therefore, clearinghouses, acting
depends on the ability to fund the purchase of the Treasury out of self-interest (or self-preservation), tend to raise margins
security. When funding becomes more difficult—that is, when when volatility increases. This is exactly what happened in
it is harder to access liquidity—the trade can unravel quickly. the Treasury futures markets. The CME clearinghouse, which
A spike in funding costs—which occurred in early-to-mid- clears Treasury futures trades, raised initial margins dramati-
March due to the metastasizing COVID crisis—started the cally during March. From February 12 to March 13, CME
steamroller that crushed this trade. clearing raised margins on the 10-year Treasury note futures
At which point the various feedback mechanisms I pointed
out in my Liquidity Trap article kicked in with a vengeance. 3 “Initial margin” is a performance bond that a trader must post in order to open a
position. It is in essence the collateral that a trader must post to a clearinghouse to enter
into a derivatives transaction. Clearinghouses set the initial margin to reduce the losses
2 An earlier notorious example of such a blowup contributed to the collapse of the they incur if a trader defaults (e.g., due to the trader’s bankruptcy) to near zero. For this
hedge fund Long Term Capital Management in September 1993. reason margined derivatives markets are sometimes referred to as a “no credit” system.

Journal of Applied Corporate Finance • Volume 32 Number 4 Fall 2020 45

(the largest Treasury futures market) by 48% and more than is struggling to meet margin calls from lenders.”5 The next day,
doubled the margin on the 30-year Treasury bond futures.4 Bloomberg reported the following:
This “pro-cyclicality” of margins—their tendency to
increase with increases in risk—was predictable, and in ED&F Man Capital Markets Inc. has been hit with growing
fact predicted in my Liquidity Trap and elsewhere. And it demands to post more capital to cover souring hedges in its
occurred in March 2020, with predictable effects. The increase mortgage division, according to people with knowledge of the
in margins—coming at a time it was more costly to finance matter. The requests are coming from central clearinghouses and
them because liquidity was tight—accelerated the departure exchanges, forcing the firm to put up almost $100 million on
from basis trades, which exacerbated the price movements, Friday alone… [And] funds holding mortgage-backed securi-
which further eroded the economics of basis trades. ties have been racing to dump them to shore up cash and
meet redemptions and their own margin calls. Some, includ-
ing Invesco’s mortgage REIT, have already said they are unable
“ to meet the demands. Bonds changing hands at fire-sale prices are
prompting a precipitous drop in the value of the securities that’s
The increase in margins—coming at a time it was
straining dealers’ books.
more costly to finance them because liquidity was
tight—accelerated the departure from basis trades, The increases in margins—representing an increase in
the demand for liquidity precisely when liquidity was drying
which exacerbated the price movements… up—were not limited to Treasuries and mortgages. Indeed,
they appeared throughout the system. Gold initial margins
” rose by 20%, oil margins by 33%, and margins on interest
Data published by the Commodity Futures Trading Commis- rate swaps by as much as 37%.6 According to the Interna-
sion (CFTC) provides evidence of the extent of the flight from tional Swaps and Derivatives Association, initial margins on
Treasury futures. On a weekly basis, the CFTC’s Commitment cleared interest rate swaps and credit default swaps rose by $73
of Traders Report divulges the positions held by certain catego- billion (or 27%) in the first quarter of 2020. Initial margins
ries of traders. These categories include “Leveraged Funds,” a on exchange-traded derivatives rose by $195 billion (or 67%).
group that includes hedge funds that are major basis traders. Moreover, these figures do not include the daily “variation
Those traders who “bought the basis” and were forced to stump margin” that firms had to pay on a daily basis to cover losses on
up cash to cover losses and pay higher initial margins would be derivatives positions. Nor do they include margins on uncleared
included in the holders of short positions in this category. OTC swaps, which under Dodd-Frank must be collateral-
The CFTC data show that from March 10 to April 14, ized. Even ignoring these other sources of increased liquidity
Leveraged Funds reduced their short positions in Treasury demand, it is clear that there was a hefty spike in the need for
futures by $130 billion by buying offsetting futures in this cash and liquid assets to meet derivatives-related margin require-
amount. To the extent these liquidations were driven by the ments. It is also clear that in addition to increasing the demand
unwinding of basis trades, they were accompanied by sales for liquidity when supply was drying up, this spike also triggered
of about $130 billion in Treasury securities. The upward large adjustments to trading positions that moved asset prices
price pressure from the purchases of futures and downward and contributed to the extreme volatility during March 2020.
pressure from sales of cash Treasuries explains the divergence
in futures and cash prices noted above—a divergence that The Crisis Dissipates—Who Gets the Credit?
clearly contributed to the further unwinding of positions. The crisis reached its peak in mid-March, but then eased
And such margin-driven “fire sales”—and “fire purchases”— rapidly. By the end of the month, many of the pricing dislo-
were not limited to Treasury futures and cash Treasuries. They cations symptomatic of liquidity stresses had disappeared.
also wreaked havoc in the market for mortgage-backed securi- Price volatility also dropped markedly. The VIX, for exam-
ties. According to an article that appeared in the Wall Street ple, peaked at 82.67 on March 16 but fell to 46.8 by April 3.
Journal in late March, “several investment funds focused on
mortgage investments are examining asset sales, and at least one

5 Gregory Zuckerman and Ben Eisen, “Mortgage Firm Struggles to Meet Margin
4 Mohit Gupta, “Coronavirus, Market Volatility and Double Margin Calls,” Cassini Calls as Market Turmoil Continues,” Wall Street Journal, March 23, 2020.
Systems Whitepaper (2020). 6 Gupta.

46 Journal of Applied Corporate Finance • Volume 32 Number 4 Fall 2020

 So why did the crisis abate? Some were quick to credit the Fed had provided ex post insurance to the clearinghouse
clearing. On March 26, CFTC Chairman Heath Tarbert said: that it seemed possible would exhaust the insurance capabil-
“I am pleased to report that market infrastructures continue to ity of the clearinghouse itself.”10
operate seamlessly.  Clearinghouses have issued—and brokers
and dealers have met—margin calls occurring multiple times Rounding Up the Usual Suspects: Hedge Funds
each day.  The value of investments may have dropped signifi- It is fairly evident who nipped a crisis in the bud, but the ques-
cantly, but the markets have not frozen as some did in 2008.”7 tion of who started it remains. Regulators (including the Fed)
The CEO of the Depository Trust and Clearing Corporation have focused on hedge funds.11 This seems plausible, since as
said that “clearinghouses played a significant role in providing the foregoing shows, they were a major proximate cause. But
stability for financial markets during COVID-19.”8 focusing on proximate causes often proves misleading and
These encomiums focused on the role of clearinghouses results in bad policy prescriptions. That is likely to be the case
in protecting the markets against defaults. But crucially, they here, for a number of reasons.
ignored altogether that the very mechanisms that the clear- First, the March episode also demonstrates that a policy
inghouses used to provide this protection—margins—were tool that has historically been advanced as a means of
themselves a major source of stress on the financial system. constraining leverage-based trading strategies (such as basis
As I noted in Liquidity Trap and other writings, protecting trading)—namely, margins—are not sufficient to end the
an important piece of the system is different from protect- problem. Indeed, they may have contributed to it by exacer-
ing the system itself; and, in fact, these goals can prove to be bating stresses on market liquidity.
antithetical. Second, blaming basis trades begs the question of why
So what did restore order? Almost certainly it was the hedge funds had become such major participants in the Treasury
intervention of the Fed. As the signs of systemic stress market by March 2020. Deeper analysis reveals that underly-
mounted—especially in the Treasury market—the Fed ing causes included the massive increase in federal debt (which
unleashed a torrent of liquidity. In the week ending March someone had to hold), and reduced foreign appetite for it.12
18, the Fed increased its balance sheet by $356 billion. The Moreover, regulation (Dodd-Frank again!) had the unintended
next week it increased it by a further $586 billion. The effect of limiting the ability of banks and unlevered investors to
next—a further $557 billion. In so doing, the Fed bought hold this debt. Thus, regulation helped to create opportunities
assets, mostly Treasury securities, and issued liquid liabilities. for hedge funds to acquire U.S. government securities, employ-
These actions mitigated fire-sale pressures, and eased liquidity ing their standard leveraging and spread trading methods: a
shortages. These were the largest increases in the Fed’s balance basis trade is a classic “hedge” trade because it involves offsetting
sheet in history, and second in percentage terms only to the positions in closely related instruments.
weeks after the Lehman Brothers collapse in September 2008. Third, and more generally, the episode illustrates the diffi-
The Fed’s major intervention began on March 15, and culty—and arguably the futility—of attempting to control
many market price distortions eased substantially almost systemic leverage by controlling the leverage of specific types
immediately. For example, the anomalous 8 basis point gap of traders, or the instruments they trade. As I pointed out
between Treasury futures prices and cash Treasuries price in my Liquidity Trap eight years ago, the attempt to control
narrowed markedly by March 20.9 leverage in the entire system by controlling the leverage of
In essence, the Fed responded to acute liquidity its individual parts is premised on a “fallacy of composi-
pressures exacerbated by margins largely as it did in response tion”—one that ignores the economic forces that drive the
to an earlier crisis, the 1987 stock market crash. Of that equilibrium amount of leverage in the system. Limiting one
episode, Ben Bernanke—at that time an academic, but later, constituent’s leverage provides an opportunity and incentive
of course, Fed chairman—wrote: “In performing its lender- for all other players not subject to such constraints.
of-last-resort function, the Fed redistributed risks in the Hedge funds were also one of the usual suspects rounded
system in a socially beneficial way. Conceptually, it is as if up in the aftermath of an earlier event—the massive spike in

7 Statement of CFTC Chairman Heath P. Tarbert Regarding COVID-19 Before the

FSOC Principals Meeting. https://www.cftc.gov/PressRoom/SpeechesTestimony/tarbert- 10 Ben Bernanke, “Clearing and Settlement during the Crash,” 3 Journal of Finan-
statement032620. cial Studies (1990) at 149-150.
8 Michael C. Bodson, Clearinghouses help stabilize financial markets during 11 Rich Miller and Jesse Hamilton, Fed Headed for a Clash with Hedge Funds and
COVID-19—Here’s How, World Economic Forum (2020). Other Shadow Bans, Bloomberg, August 3, 2020.
9 Daniel Barth and Jay Kahn, “Basis Trades and Treasury Market Liquidity,” Office 12 Daniel Barth and Jay Kahn, Basis Trades and Treasury Market Liquidity, Office of
of Financial Research Brief Series (2020). Financial Research Brief Series (2020).

Journal of Applied Corporate Finance • Volume 32 Number 4 Fall 2020 47

repo rates in September, 2019. As the third quarter neared its when liquidity is drying up, and then compound the problems
end, repo rates spiked from around 2% to 10%. This caused and difficulty by triggering asset fire sales that further increase
substantial havoc in the funding markets, and imposed volatility. Clearing and collateralization of uncleared trades do
punishing losses on firms, including hedge funds, that had to not mitigate this source of systemic risk: they are a primary
pay the high rate to fund their positions. contributor to it. At best, some of the Dodd-Frank-mandated
Because of their large role in the market at this time, hedge changes to the infrastructure of the financial markets were
funds were again implicated for causing the spike because irrelevant to the recent crisis: others clearly contributed to it.
they had increased their holdings of Treasuries, and borrowed The other major lesson is our reliance on the Fed to
(via repo) to buy them.13 But this again begs the question maintain financial stability. Fortunately, in this instance, the
of why hedge funds were such large buyers. And as already Fed was up to the task and intervened decisively to discon-
suggested, the provisions of Dodd-Frank designed to limit nect the destabilizing margin feedback loop by providing
banks’ market-making and position holding may well provide ample liquidity.
the key to the puzzle. But this reliance raises two concerns. The first is whether
What’s more, these same leverage and liquidity ratios the Fed will always be up to the task. There is room for doubt.
imposed on banks by Dodd-Frank may also even have contrib- In contrast to its actions in March 2020, the Fed did not
uted to the shortage of funds in the repo market.14 This is clearly respond promptly or effectively to supply additional liquidity
the explanation favored by important bankers, including most in response to the disruption of the repo market in September
notably J.P. Morgan’s Jamie Dimon.15 On the other hand, such 2019. Perhaps Fed policymakers learned their lesson in Septem-
an explanation may well be a self-interested attempt to distract ber and applied it in March, but the incident is sufficient to
attention from the possibility that major banks in the United show that the Fed is not infallible. This is a sobering prospect
States exploited the regulation-created frictions in funding given just how reliant the market—indeed, the world—is on
markets to exercise market power by withholding funds during a the wisdom of the Fed, and the efficacy of its actions.
time of high demand driven by quarter-end technical factors—a The second concern is related to Bernanke’s character-
possibility I explored in my column in October 2019.16 ization of the Fed as the “insurer of last resort.” One of the
In sum, focusing on proximate causes, like hedge funds potentially perverse effects of insurance is moral hazard. In
or their specific strategies, and ignoring underlying economic the present instance, market participants’ belief that the Fed
realities like burgeoning federal debt and regulation-induced will intervene to supply liquidity during crisis situations can
constraints on the ability of some investors to hold it, leads encourage them to employ the kinds of strategies—including
to superficial misdiagnoses. Calls for a “new Dodd-Frank” the nickels-before-steamroller basis trades cited here—that can
that have been made by luminaries including former Fed Vice be the catalyst for a crisis.
Chair Janet Yellen would almost certainly repeat the errors of This last concern is perhaps better described as a conun-
the old Dodd-Frank: namely, they would be nostrums that drum: as yet no one has devised a way that the Fed can
do not address true causes, and which would create new risks intervene to stabilize without creating moral hazard. Be that
or exacerbate old ones. as it may, the events of March 2020 should dispel any illusions
that the clearing and collateral mandates of Dodd-Frank are
Addicted to the Fed? a reliable bulwark against systemic risk, and may contribute
The major lesson of the COVID-19-driven events of March to it by baiting the liquidity trap. For better or worse, the real
2020 is in fact an old story. Shocks that lead to large changes in bulwark is the Fed. And it has to get it right every time.
asset prices trigger margin calls and increases in initial margin
that, first of all, increase the demand for liquidity precisely Craig Pirrong is Professor of Finance at the University of Hous-
ton. Since studying grain futures delivery mechanisms on behalf of the
13 Fernando Avalos, Torsten Ehlers, and Egemen Eren, “September Stress in Dollar Chicago Mercantile Exchange in 1989, he has focused closely on the
Repo Markets: Passing or Structural?” BIS Quarterly Review (December, 2019). nexus between finance and industrial organization, particularly the possi-
14 Craig Pirrong, “Clearing and Collateral Mandates: A New Liquidity Trap?,” Journal
of Applied Corporate Finance, Vol. 24, Issue 1, pp. 67-73, Winter 2012. bility of market power and manipulation. His entertaining and informative
15 Greg Robb, “Dimon Says Money-Market Turmoil Last Month Risks Morphing Into commentary on “macro-structure” issues such as market liquidity, deriva-
a Crisis If the Fed Falters,” MarketWatch (October 18, 2019). https://www.marketwatch.
com/story/dimon-says-money-market-turmoil-last-month-risks-morphing-into-a-crisis-if- tives pricing, and the unintended effects of clearing mandates and position
fed-falters-2019-10-18. limits may be found at his blog Street Wise Professor (https://street-
16 Craig Pirrong, “The Repo Spike: The Money Trust Revisited,” Streetwise Professor
wiseprofessor.com/).
blog (October 5, 2019). https://streetwiseprofessor.com/the-repo-spike-the-money-trust-
revisited/.

48 Journal of Applied Corporate Finance • Volume 32 Number 4 Fall 2020

ADVISORY BOARD EDITORIAL
Yakov Amihud Carl Ferenbach Donald Lessard Clifford Smith, Jr. Editor-in-Chief
New York University High Meadows Foundation Massachusetts Institute of University of Rochester Donald H. Chew, Jr.
Technology
Mary Barth Kenneth French Charles Smithson Associate Editor
Stanford University Dartmouth College John McConnell Rutter Associates John L. McCormack
Purdue University
Amar Bhidé Martin Fridson Laura Starks Design and Production
Tufts University Lehmann, Livian, Fridson Robert Merton University of Texas at Austin Mary McBride
Advisors LLC Massachusetts Institute of
Michael Bradley Technology Erik Stern Assistant Editor
Duke University Stuart L. Gillan Stern Value Management Michael E. Chew
University of Georgia Gregory V. Milano
Richard Brealey Fortuna Advisors LLC G. Bennett Stewart
London Business School Richard Greco Institutional Shareholder
Filangieri Capital Partners Stewart Myers Services
Michael Brennan Massachusetts Institute of
University of California, Trevor Harris Technology René Stulz
Los Angeles Columbia University The Ohio State University
Robert Parrino
Robert Bruner Glenn Hubbard University of Texas at Austin Sheridan Titman
University of Virginia Columbia University University of Texas at Austin
Richard Ruback
Charles Calomiris Michael Jensen Harvard Business School Alex Triantis
Columbia University Harvard University University of Maryland
G. William Schwert
Christopher Culp Steven Kaplan University of Rochester Laura D’Andrea Tyson
Johns Hopkins Institute for University of Chicago University of California,
Applied Economics Alan Shapiro Berkeley
David Larcker University of Southern
Howard Davies Stanford University California Ross Watts
Institut d’Études Politiques Massachusetts Institute
de Paris Martin Leibowitz Betty Simkins of Technology
Morgan Stanley Oklahoma State University
Robert Eccles Jerold Zimmerman
Harvard Business School University of Rochester

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