Finance

With recent instability in some U.S. banks and the crypto “winter” that began last year, experts say it’s more important than ever for finance professionals to understand the innovations – and challenges – in the sector.

“The world is changing quickly, and so too are the skills needed to thrive,” says John Hull, a University Professor of finance at the ��߲ݴ�ý’s Rotman School of Management.

Hull is the academic director of the Rotman Financial Innovation Hub (FinHub), which is designed to help fintech practitioners, students and faculty to share insights and equip students with best-in-class knowledge of financial innovation. He created the hub five years ago with Andreas Park, professor of finance at U of TMississauga, and the late Peter Christoffersen, who was a professor of finance at Rotman.

“We recognized there were lots of things happening in the financial sector that are transformative and different, and we wanted to develop the knowledge base and pass it on to the students so they can compete in this space,” says Park, who has a cross-appointment to Rotman.

Each year, students can take courses taught by FinHub-affiliated faculty. That includes Hull and Park, who offer courses on machine learning, blockchain, decentralized finance and financial market trading.

One of the most in-demand MBA electives is machine learning and financial innovation, which introduces students to the tools of machine learning. A similar course is compulsory for students in the master of financial risk management and master of finance programs.

Students are required to learn Python in the course, with Hull calling the programming language “the new Excel” as it becomes a common requirement for many jobs in finance.

“I’ve met traders in their 40s who go and learn Python because it simplifies their workflow,” says Park. “It’s all about inferring data and making sense of it, and then predicting future data using machine learning tools. And to do that, you need to learn Python.”

The machine learning course is offered to full-time MBA students in March and April of their first year. It’s also available as an elective in their second year.

“Many MBA students get involved in machine learning as part of their summer internship, so it's important to give them an opportunity to familiarize themselves with machine learning and Python applications prior to that time,” says Hull.

MBA student Cameron Thompson took the course prior to an internship at Boston Consulting Group (BCG) and says the hands-on practice in class was invaluable, with or without an extensive background in computer programming.

“Being familiar with common machine learning terminology from day one on the job was quite useful,” says Thompson, who will be returning to BCG full-time following graduation. “The course builds a solid foundation for using data in a strategic way and then adds the machine learning content – it’s hard to go anywhere without seeing an application.”

In his second year, Thompson pursued an independent FinHub study project – sponsored by the Bank of Canada – that involved working with researchers from Rotman and the Faculty of Applied Science & Engineering on a natural language processing model.

MBA grad Fengmin Weng, who took the elective course with Hull, says the insights from class prepared her to lead a machine learning project at TD.

“Machine learning is definitely the trend in the financial industry, particularly in the risk management area,” says Weng, who came from an accounting background when she pursued the master of financial risk management program.

“It definitely helps us to make better decisions around our strategy,” she says. “If you want to develop your career in the risk area, machine learning is your weapon.”

Richard Liu, who received his MBA from Rotman three years ago, says the machine learning course was one of the most eye-opening parts of his MBA experience. Today, he says he uses many of the concepts from the course in his work as a financial planner.

“I’m able to recognize when it’s more effective to train computers to enhance our work, how to coexist with robo-advisors and how to automate some of our financial planning processes,” says Liu.

Students involved with FinHub courses are equipped with the tools to think critically about the implications and benefits of emerging technologies in the financial sector, says Park, adding that “they’re able to enter an organization and use these tools to help improve processes and strategies.”

Hull, meanwhile, says student who take the course gain insight into the direction the finance world is heading – namely “that machine learning is becoming more and more important in business."

How to help small businesses during COVID-19 pandemic: U of T expert

Christopher.Sorensen — Mon, 23 Mar 2020 15:31:57 +0000

How to help small businesses during COVID-19 pandemic: U of T expert

Christopher.Sorensen Mon, 03/23/2020 - 11:31

Cutline

A message to customers hangs on the front of Niuda Hand-pulled Noodles in downtown Toronto (photo by Steve Russell/Toronto Star via Getty Images)

Topic

Rotman School of Management

U of T Mississauga

The COVID-19 pandemic is having a “profound impact” on Canada’s small businesses, says Lisa Kramer, a professor of finance at the ��߲ݴ�ý Mississauga.

On Monday, Ontario Premier Doug Ford ordered all non-essential services to shut down for 14 days, starting 11:59 p.m. on Tuesday, March 24. This came after Toronto’s medical officer of health last week called on all non-essential businesses, including clothing stores and salons, to close. The announcement is an expansion of the earlier mandated closure of theatres nightclubs, restaurants and bars, with the exception of take-out and delivery operations.

These closures, combined with people following expert advice to stay home as much as possible and practise social distancing, means businesses are feeling the pinch.

Kramer says the additional measures will hit the service sector “especially hard,” adding that businesses are trying to pay employees, but for many small businesses that may not be possible because they are already working with such thin margins and have other bills to pay, including rent.

“We’re lucky we have a government that’s trying to be responsive,” Kramer says, noting the government is loosening restrictions for those who need to access employment insurance and providing access to short-term loans.

The overall impact on business will depend on how long the pandemic lasts. If it’s only a couple of weeks, most businesses should be able to get back up and running, but if the shutdowns extend much longer, Kramer says, “inevitably, we’ll see some small businesses and even large businesses fail.”

In addition to government measures, Kramer says consumers who have the financial means can also step up to help.

Some businesses are taking orders over the phone or online and offering delivery, Kramer notes. Some restaurants are still offering take-out and delivery. If purchasing goods or services now isn’t possible, gift cards may be another option, according to Kramer. She says that having money now means businesses can continue to pay employees.

There’s also the option of making a donation. Some arts organizations allow the cost of a ticket for a cancelled performance to be donated, with patrons receiving a tax receipt, Kramer says. Or donations can be made to organizations like The AFC (formerly the Actor’s Fund of Canada), which is a last resort for those in the entertainment industry who are struggling to pay bills.

Helping businesses is much the same as reaching out to a neighbour to help because it’s ultimately about helping people, Kramer says, explaining small businesses are run by individuals or families and employ people who are “equally affected by the barrage of bad news.”

While many businesses are having to shut their doors, Kramer notes there are still workers on the front lines of grocery stores, pharmacies and gas stations, which remain open. They have become providers of essential services, yet they are paid the least, she says.

“We need to think deeply about how we value work in our country,” Kramer says, adding there’s a lot to be said about the fabric of a community that knows how to help one another.

Climate change should be part of regular savings and investment decisions: U of T's Tiff Macklem

Christopher.Sorensen — Thu, 04 Jul 2019 15:08:50 +0000

Climate change should be part of regular savings and investment decisions: U of T's Tiff Macklem

Christopher.Sorensen Thu, 07/04/2019 - 11:08

Cutline

To accelerate climate-conscious investment, we need to actively engage Canadians in the climate opportunity and make their stake in fighting climate change more tangible (photo by Lisa Lightbourn)

Topic

Rotman School of Management

Sustainability

The Conversation

As a member of the Expert Panel on Sustainable Finance, we recently published our final report on mobilizing financial services to support Canada’s economic prosperity through the global transition to cleaner growth.

Our recommendations seek to connect the dots between Canada’s climate objectives, its economic ambitions and its investment imperatives. The overriding message is that if Canada is to meet its long-term environmental and economic objectives, sustainable finance needs to go mainstream.

Put simply, climate-conscious risk management and investment need to be part of the everyday savings and investment decisions made by individuals and businesses across Canada.

The report makes recommendations to grow and scale the market for sustainable finance, and then focuses on the products and services needed to meet the financing requirements of Canada’s economic sectors that are critical to the transition to cleaner growth, such as clean technology, oil and natural gas, infrastructure, buildings and electricity.

Normally, this would be all you need; market forces should do the rest. But globally, the market is not keeping up with climate change, and Canada is not keeping up with its peers.

Engaging Canadians

To accelerate climate-conscious investment, we go a step further and recommend actively engaging Canadians in the climate opportunity and making their stake in fighting climate change more tangible.

To engage them, we recommend the federal government create an incentive for Canadians to invest in accredited climate-conscious products. Specifically, we recommend that the minister of finance create additional space in RRSPs and defined contribution pension plans for these investments and offer a “super deduction” – in other words, a taxable income deduction greater than 100 per cent – on eligible investments.

With few Canadians maximizing their registered savings contributions, the super deduction is a way to broaden the reach to every Canadian with a registered savings or defined contribution pension plan.

This simple intervention could be powerful. The economic effects of climate change and the opportunities for new value creation would be discussed and debated as part of Canadians’ savings and investment decisions, and individual investors would have a tangible stake in the performance of solutions.

The effect would be to significantly accelerate the fly wheel of climate-conscious investment advice, product development and capital flows to sustainable economic activities.

Working with provinces

To engage the business and financial communities, we recommend that the federal government work with the provinces and the private sector to develop a capital plan that maps out the necessary investments to realize Canada’s environmental and economic objectives.

This all starts with an ambition for innovation and global competitiveness, sector by sector, and a strategy to get there. The capital plan to underpin this strategy would include financing requirements and sources – both public and private – and identifying critical financing gaps.

This sounds like a big job – and it is. But fundamentally, it’s what anyone would do when considering an investment.

Suppose you decide to remodel your home to make it more comfortable, improve its aesthetics and reduce your energy costs and GHG emissions.

You would begin with a vision for your remodelled home; you would research the available technologies and designs and develop a strategy to achieve your vision; and you would develop a capital plan to finance the project, drawing on different sources – perhaps some of your own savings, a government green grant or loan program and a new mortgage from a bank.

You would also consult your home insurance provider and consider how to make your remodelled home more climate-resilient and, in doing so, improve your comfort and reduce your home insurance premiums. Our recommendation is simply that we do this for the whole economy, sector by sector.

‘Mid-century objective’

We also recommend extending the horizon for Canada’s climate ambitions beyond 2030 to 2050. With 2030 little more than a decade away, we need a mid-century objective to provide the horizon to mobilize capital at scale.

Together, a clear vision, a mid-century target and an associated capital plan would spell out the scope and horizon of the opportunity very tangibly, providing a beacon for the private sector and a road map to where their ingenuity, expertise and capital are needed.

Of course, the capital plan would be a forecast and would need to be updated as new technologies develop, climate effects materialize and new information becomes available, but a plan beats no plan.

Canada has some catching up to do, but we believe our country can be among the leaders in the global transition to a low-emissions, climate-resilient future. But seizing this opportunity will require us to lean in and put some skin in the game. We believe our practical and achievable recommendations could prime the opportunity and make climate change part of Canadians’ everyday savings and investment decisions.

Tiff Macklem is the dean of the Rotman School of Management at the ��߲ݴ�ý.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

U of T ranked in top 10 globally in nine subjects by influential Shanghai Ranking Consultancy

geoff.vendeville — Fri, 28 Jun 2019 14:29:24 +0000

U of T ranked in top 10 globally in nine subjects by influential Shanghai Ranking Consultancy

geoff.vendeville Fri, 06/28/2019 - 10:29

Cutline

The ��߲ݴ�ý was one of a handful of universities that ranked among the top 50 in 35 subjects in the Academic Ranking of World Universities (photo by Nick Iwanyshyn)

Geoffrey Vendeville

Topic

Global Lens

Dalla Lana School of Public Health

Faculty of Arts & Science

Faculty of Medicine

Finance

Geography and Planning

Global

Leslie Dan Faculty of Pharmacy

Psychology

Rankings

Shanghai Ranking Consultancy

Sociology

The ��߲ݴ�ý ranks among the top 10 universities in the world in subjects as diverse as psychology, finance and geography, according to the latest Academic Ranking of World Universities.

The ranking, released this week by the Shanghai Ranking Consultancy, placed U of T in the top 10 in nine subject areas – two more than last year. In clinical medicine, U of T shot up to fifth from 15th; in geography, it moved up to fourth from 21st; and in pharmacy and pharmaceutical sciences, it climbed to eighth from 37th.

The other subjects in which U of T placed in the top 10 were: psychology (2); medical technology (4); automation and control (5); sociology (6); public health (7); and finance (9).

Among Canadian universities, U of T tied or ranked first in 30 subjects, more than any other institution.

“These results recognize the ��߲ݴ�ý's excellence across a wide range of subjects,” said U of T President Meric Gertler.

“Our across-the-board strength facilitates interdisciplinary research and gives students in all fields the opportunity to work alongside world-class scholars.”

The prestigious Academic Ranking of World Universities is based on five criteria, including scholarly paper output, citations and awards. The results take into account the number of papers produced by an institution, how many appear in top journals and citation impact as measured by actual citations versus the average number of citations in that field.

The ranking also considers awards and honours and gives weight to international collaboration. In the social sciences, there is less emphasis than in sciences and engineering on citation impact and international collaboration, and more weight on the total number of published papers.

Over 4,000 universities were ranked in a total of 54 subject areas.

U of T ranked in the top 50 across 35 subject areas globally, the same as the University of California, Berkeley and more than any other university apart from Harvard University, Stanford University and the University of Michigan.

Overall, U of T moved up in the rankings in 17 subjects.

The latest ranking comes on the heels of the QS World University Rankings, which placed U of T first in Canada and 29th across 1,000 universities worldwide.

U of T continues to be the highest ranked Canadian university and one of the world’s top-ranked public universities in the five principal international rankings: Times Higher Education, QS World Rankings, Shanghai Ranking Consultancy, U.S. News Best Global Universities and National Taiwan University.

U of T's Tiff Macklem discusses findings of expert panel on sustainable finance at event with federal finance minister

rahul.kalvapalle — Wed, 19 Jun 2019 15:12:51 +0000

U of T's Tiff Macklem discusses findings of expert panel on sustainable finance at event with federal finance minister

rahul.kalvapalle Wed, 06/19/2019 - 11:12

Cutline

Tiff Macklem, dean of U of T’s Rotman School of Management, chaired an expert panel on sustainable finance that made 15 recommendations about the transition to a "climate-smart" economy (photo by Lisa Lightbourn)

Topic

Rotman School of Management

Sustainability

As the world increasingly feels the effects of climate change, the financial sector has a vital role to play in the transition to a smarter and more sustainable economy.

That’s one of the key messages of a final report by an expert panel on sustainable finance led by Tiff Macklem, dean of the ��߲ݴ�ý’s Rotman School of Management.

Macklem, a former senior deputy governor of the Bank of Canada, was joined by Finance Minister Bill Morneau at U of T last week and fellow panel members Barbara Zvan, of the Ontario Teachers’ Pension Plan, and Andy Chisholm, of RBC Financial Group, for a round-table discussion on the report’s findings. The report, commissioned by the federal government, lays out 15 recommendations that aim to find common ground between Canada’s environmental sustainability goals and economic ambitions, as well as incentivize market activities and consumer behaviours to aid the transition to a “climate-smart” economy.

“We know that in Canada, because we’re an energy-producing country, we need to think about how we can continue to be efficient in that part of the economy but drive down carbon emissions, while not actually impacting people that are struggling with the cost of living,” Morneau said in remarks before the panel discussion.

“What I’m so delighted about this morning is that we’re having the opportunity to get the benefit of advice from the panel, the work that’s being done, and to talk about how we can get through this in the business sector.”

Barbara Zvan, the chief risk and strategy officer at the Ontario Teachers’ Pension Plan, and Finance Minister Bill Morneau (photo by Lisa Lightbourn)

Macklem kicked off the discussion, moderated by BNN Bloomberg anchor Amanda Lang, by highlighting the need for finance companies and organizations to take part in collaborative – rather than isolated – efforts toward a cleaner economy.

“For the financial community, one of the things we really observed is that there’s a lot [of initiatives] going on, but it’s a little uncoordinated and it’s not as strategic as it could be,” he said. “But it’s early days. Our hope is that this [report] will give a roadmap that the financial community can come together on and move along quicker.”

Zvan, the chief risk and strategy officer at the Ontario Teachers’ Pension Plan, honed in on the third recommendation from the report, which calls for the government to establish a sustainable finance action council to take advantage of the expertise of the private sector in formulating sustainability-related policy and regulations.

“It’s really key – the connection between the private industry and government. We saw in all our interviews so much energy, really what was lacking was the scale,” said Zvan, who serves as chair of the board of directors of the Rotman-affiliated International Centre for Pension Management.

“If we can bring these two groups together… bring the right leaders, right investment, right government individuals – you can get a lot done.”

Chisholm, a director of RBC’s board, said it was time for the finance industry to take a glass-half-full approach towards the challenge of transitioning to a sustainable future.

“Let’s accept this as a reality and embrace it and turn this adversity on its head into a competitive advantage,” he said.

To that end, Macklem used the example of climate-related financial disclosures, which aim to integrate information pertinent to climate change into financial reporting.

“On that notion of turning things on their head – rather than resisting disclosure, we should be embracing it as a means of telling our story, showing our targets and then proving that we’re hitting them,” he said.

Chisholm added that Canada should first look to establish itself as a leader in environmentally and socially responsible finance, “and then get the rest of the international community to come along because we’re proving that this is something that can be done.”

Zvan warned that Canada can’t afford to be complacent as that could leave it trailing behind other countries in the transition to an environmentally friendly economy.

“If you go the U.K. and Europe, most people are aware of the enormity of the efforts that are going on there. But don’t underestimate – there’s a lot of effort in China, Hong Kong and other countries that will shape how our industries will be sought out and looked at,” Zvan said.

“From a market competitiveness point of view and a jobs point of view, we need to keep that in mind.”

At the end of the talk, the experts took questions from the floor. A Rotman student asked about the importance of education in driving the shift towards a greener finance landscape.

“Education is a big part of this,” Macklem responded. “It starts at the university level but we’ve also got to develop programs for executive training, for boards of directors. We have a number of recommendations for [educational programs] for accountants, lawyers and consultants.”

As Macklem noted, the report recommends that the government set up funding initiatives to help financial associations create educational programs to promote understanding and action on the financial risks and opportunities related to climate change and sustainability.

U of T's Creative Destruction Lab joins global group pursuing a new, more stable cryptocurrency

geoff.vendeville — Tue, 18 Jun 2019 14:48:25 +0000

U of T's Creative Destruction Lab joins global group pursuing a new, more stable cryptocurrency

geoff.vendeville Tue, 06/18/2019 - 10:48

Cutline

The Creative Destruction Lab is joining a global group of financial and technology firms, as well as non-profits, that's seeking to develop a new cryptocurrency pegged to government-issued currencies (photo by Geoffrey Vendeville)

Geoffrey Vendeville

Topic

Global Lens

Creative Destruction Lab

Research & Innovation

Rotman School of Management

Startups

The Creative Destruction Lab, a seed-stage entrepreneurship program affiliated with the ��߲ݴ�ý's Rotman School of Management, is joining a global group of organizations focused on developing a new cryptocurrency designed to increase access to financial services around the world.

The new cryptocurrency, called Libra, is expected to be available in 2020 and is designed to be more stable than alternatives like Bitcoin – the value of which has swung between about $4,600 and $12,000 this year alone. Libra, by contrast, will be pegged to a reserve of government-issued currencies like the euro or U.S. dollar.

More than two dozen big-name backers in finance, tech, the non-profit sector and more have already signed on as founding partners of a non-profit governing organization, based in Geneva, Switzerland, that is to govern the cryptocurrency’s infrastructure and ecosystem. They include MasterCard, Visa, Uber, Spotify and Facebook, which is leading the effort. CDL is currently the only academic – and Canadian – entity that's agreed to explore the initiative.

“To the extent that cryptocurrency volatility has been the thing that's been holding it back, this is a bold step in the other direction,” Joshua Gans, CDL’s chief economist and a professor at the Rotman School of Management, told U of T News.

Gans added that CDL was approached because the incubator pioneered a program to help entrepreneurs design and launch crypto-based startups using blockchain. There were 25 startups in CDL's blockchain stream last year. One company in the program, for example, aims to provide a more affordable way to send remittances.

In a blog post on Medium, Gans said CDL became involved in the Libra project not only to support its own ventures, but to help create a thriving startup ecosystem around the world.

“Our mission is purely social,” he wrote. “We are in the business of creating startup ecosystems that do not require a fixed physical location. In that regard, we see Libra as a public utility that can support just that – taking digital payments to the next level to allow an application layer that could transform economic transactions and more.”

The new cryptocurrency will be built on blockchain technology the likes of which made Bitcoin possible, storing records of transactions and other important information across “nodes.”

For Ajay Agrawal, CDL's founder and a professor at Rotman, one of the biggest opportunities in joining Libra is to work with its code.

“We are particularly enthusiastic about the potential of Libra’s programming language, Move,” he said in a statement. “Thoughtfully designed smart contracts operating on a widely accessible and stable global currency platform will unlock never-seen-before gains from trade, benefiting society at a meaningful scale.”

Where will it all lead? Until Libra hits the market, Gans said it’s unclear. “We take the ‘lab’ part of Creative Destruction Lab very seriously,” he wrote in Medium. “For that reason, we believe that everything we do is an experiment and Libra is no different.”

“So the short answer is that I don’t know where this will lead, but I am very excited that it is happening.”

Peter Christoffersen, a Rotman expert in financial risk, was 'a global thinker pushing the boundaries'

noreen.rasbach — Mon, 17 Sep 2018 04:00:00 +0000

Peter Christoffersen, a Rotman expert in financial risk, was 'a global thinker pushing the boundaries'

noreen.rasbach Mon, 09/17/2018 - 00:00

Cutline

Peter Christoffersen was devoted to teaching and wrote the seminal textbook "Elements of Financial Risk Management"

Topic

Rotman School of Management

Peter Christoffersen was an outstanding scholar whose work had a profound influence in the world of business and finance, but he remained modest, easygoing and devoted to his family, friends and colleagues.

Christoffersen, a professor of finance at the Rotman School of Management, was a leading expert on the management of risk – a crucial issue for the financial and business community, and the economy as a whole. He held the TMX Chair in Capital Markets and twice was a Bank of Canada fellow.

Christoffersen’s stellar career was cut short in June, when he died of cancer at the age of 51.

“He was at the very leading edge of his field – a global thinker pushing the boundaries,” said Tiff Macklem, dean of the Rotman School of Management. While Christoffersen’s work on volatility modelling, risk management and option pricing was often cited in academic journals and won many prizes, he also “really wanted his research to be used,” Macklem said.

And it was, steering senior policy makers in the public and financial sectors to “understand the big forces that were going on in the industry,” Macklem said. Christoffersen’s work was particularly crucial in helping financial institutions and other businesses manage and put a price on their risks.

In recent years, Christoffersen began new work on the intersection of technology and finance, a crucial field that is becoming increasingly important to business. “He was looking at the implications of big data and machine learning for the financial services industry, and even for the Canadian economy,” Macklem said.

Macklem described Christoffersen as “every dean’s dream,” because he was an outstanding researcher, a popular teacher, and he was always willing to take on new projects. “When he saw something that needed to be done, he would step up.” Christoffersen helped create a new Master of Financial Risk Management program at U of T, and the new Rotman FinHub – a financial innovation meeting place that brings together financial services firms, entrepreneurs, students and faculty so they can understand the impact of new technology.

At the same time, Macklem said, Christoffersen had a “wry wit and an infectious smile,” and he was self-effacing about his scholarly achievements. He always made sure colleagues and students got credit for their work. “His modesty, in what can be a very competitive field, was very endearing. He was extraordinarily well liked by his colleagues.”

In addition to his research, Christoffersen was devoted to teaching, where he was known as a tough task-master, but also highly supportive and possessing an ability to distill complex ideas and make them understandable. He taught undergraduate and graduate courses, and had more than 20 PhD students over the years, a high number for the finance field.

Chayawat Ornthanalai, a PhD student of Christoffersen’s who is now an associate professor of finance at Rotman, describes his former supervisor as “an optimist, a cup-half-full guy.”
Ornthanalai said he had two co-supervisors for his PhD, and of the two professors, “Peter was always the good cop.”

Christoffersen had a hands-on approach, where he encouraged students to use real-world data to replicate results that had been predicted in theoretical work. Ornthanalai said he now finds himself using that same style in his own teaching. And he also tries to replicate Christoffersen’s broader approach to life, especially the value he placed on spending time with his family.

Another of his PhD students, Redouane Elkamhi, said Christoffersen provided a valuable – and unusual – mix of patience, a positive attitude and subtle guidance. “A journey to his office made you feel like you could do something after all. He could make you believe in yourself and go back and work even harder,” said Elkamhi, now an associate professor of finance at Rotman.

Kris Jacobs, a finance professor at the University of Houston’s C.T. Bauer College of Business who met Christoffersen when they were both professors at McGill, said his friend combined a very disciplined work ethic with a laid-back nature. “He was a hard worker but a fun guy to be around. He was a good guy to have a beer with. He got along with everybody.”

Jacobs, who co-wrote many papers with Christoffersen over the past 20 years, said his colleague had a valuable combination of talents. He had very strong mathematical and statistical skills “but at the same time he thought like an economist. [He understood] how people behaved, and their incentives. He had intuition for that.”

That approach was reflected in Christoffersen’s seminal book, Elements of Financial Risk Management, a textbook that is internationally recognized as a crucial contribution to the field. “It is a lot harder than people think to write a good textbook in finance,” Jacobs said, but Christoffersen managed to do it by deftly combining state-of-the-art research with practical relevance.

Christoffersen’s self-discipline was evident in the creation of the book, says his wife Susan Christoffersen (pictured with him at left), a professor of finance and vice-dean of undergraduate and specialized programs at Rotman. At the time he was writing the textbook, their children were very young, so she was concerned it would take him away from family duties. “He made a deal with me that he would spend Saturday afternoon from 1 to 5 p.m. for 12 weeks writing the book. I thought he was crazy, as how could one possibly write a book draft in that amount of time, but true to his word he did just that and actually finished in about 10 weeks.”

Peter Christoffersen was born in 1967 in the small town of Menstrup, Denmark, where his parents owned and ran an inn, called a “kro" in Danish. He and his brother were put to work on the many tasks that needed to be done to keep the enterprise running. “Peter often said that school work was the one excuse that he could use to get out of the various duties at the kro, and maybe this was part of the reason he became such a diligent student,” Susan said.

Growing up in a tight-knit community, and working in a business that emphasized hospitality, had a lasting impact, she added. “Even after moving away he carried with him a love of hosting friends and family,” she said. “In grad school he was renowned for his margaritas on our back deck.”

Christoffersen went to the University of Copenhagen for a degree in economics, and then headed off to the United States where he got a PhD at the University of Pennsylvania – he had perfected his English while spending a year in Michigan on an exchange program at the age of 16.

It was at U Penn that he met Susan, a Canadian from British Columbia who was working on a finance PhD at the university’s Wharton School. The two were married in 1996. Christoffersen worked as an economist at the International Monetary Fund in Washington for two years before he and Susan moved to McGill University in 1998, where they both took up assistant professorships.

The couple moved to Toronto in 2010, joining U of T’s Rotman School of Management. “The university was growing and Rotman was climbing in the ranks,” Susan said, making the move attractive to both of them.

Christoffersen retained his deep connection to Denmark, returning every year to visit family and friends. He and his immediate family spent a sabbatical year there in 2007-2008. “He was very proud of his Danish heritage and had many qualities of a good Dane,” Susan said. “He was incredibly humble, he was really smart, and he had a quick wit,” she said. “I remember constantly laughing through our 22 years of marriage.”

Christoffersen loved sports, and transferred his European immersion in soccer into a deep interest in North American football. He was also a voracious reader, with an endless curiosity and a depth of knowledge on a vast range of topics, Susan said, and was involved in every aspect of their two sons’ lives.

He was diagnosed with kidney cancer in 2014, and it spread to his lungs about two years ago. Even as it progressed in the last months of his life, he continued to teach and kept involved in academic research and activities.

“He appreciated life. He stayed constantly curious,” Susan said. “He never stopped living or enjoying life despite having to face the uncertainty and difficulties of his disease.”

Indeed, he kept in touch with colleagues by email until shortly before his death. “A week before he passed away he was finishing up a paper for submission,” she said. “Peter left this world with his foot on the gas pedal.”

Christoffersen leaves his wife Susan, sons Nicholas and Phillip, his parents Jenna and Johannes, and brother Jacob. A scholarship in his name will be established at the Rotman School of Management.

OSC should re-examine its policy of no-contest settlements, U of T expert writes in the Globe and Mail

geoff.vendeville — Wed, 11 Jul 2018 15:10:43 +0000

OSC should re-examine its policy of no-contest settlements, U of T expert writes in the Globe and Mail

geoff.vendeville Wed, 07/11/2018 - 11:10

Cutline

Anita Anand is the J.R. Kimber Chair in Investor Protection and Corporate Governance in the ��߲ݴ�ý's Faculty of Law (photo by Johnny Guatto)

Topic

Under a no-contest settlement, companies or individuals can resolve a dispute with the Ontario Securities Commission without having to admit wrongdoing.

The policy is meant to help the regulator enforce the law expeditiously. But law professor Anita Anand, the J.R. Kimber Chair in Investor Protection and Corporate Governance in the Faculty of Law, says there's reason to question the deterrence value and efficiency of no-contest settlements.

The average time taken to reach such a settlement has increased, while the process also lacks transparency, she argues in The Globe and Mail.

“We should question whether the alleged benefits of no-contest settlements, including efficiency and deterrence, outweigh the weaknesses of this enforcement program,” she says.

Lots of options for socially conscious investors, U of T finance professor writes in the Globe and Mail

Romi Levine — Tue, 10 Jul 2018 19:07:11 +0000

Lots of options for socially conscious investors, U of T finance professor writes in the Globe and Mail

Romi Levine Tue, 07/10/2018 - 15:07

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Socially responsible investing no longer means a low return on investment, says ��߲ݴ�ý Professor Lisa Kramer (photo by American Public Power Association via Unsplash)

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Rotman School of Management

��߲ݴ�ý Mississauga

For those who want to put their money where their morals are, there are plenty of options for investing more ethically, writes Lisa Kramer, a professor of finance at ��߲ݴ�ý Mississauga and the Rotman School of Management in the Globe and Mail.

Socially responsible investing now comes in many forms, Kramer says, for those who do not want to support particular industries like tobacco, firearms or fossil fuels.

But she warns that, because there is no regulatory body that determines what is considered a socially conscious investment, investors “must look under the hood to confirm that a fund’s definition of ethical aligns with their own.”

Kramer also says ethical investing doesn’t have to come at a steep price – there are still ways of earning a good return on ethically-focused investments.

“Whether your own moral compass gravitates to human rights, animal rights, green energy, or a combination of these and other progressive ideals, it’s no longer necessary to pick between your conscience and your pocketbook when choosing how to invest,” she writes.

Read the Globe and Mail article

Know when to FODL'em: U of T expert says Bitcoin investors need to learn from their mistakes

Christopher.Sorensen — Tue, 06 Feb 2018 19:11:47 +0000

Know when to FODL'em: U of T expert says Bitcoin investors need to learn from their mistakes

Christopher.Sorensen Tue, 02/06/2018 - 14:11

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Bitcoin has lost 70 per cent of its value since hitting an all-time high in mid-December, with investors making some predictable missteps along the way, Lisa Kramer says (photo by Zach Copley via Flickr)

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If you found this week's swoon in stocks difficult to stomach, spare an antacid tablet for those who recently loaded up on cryptocurrencies like Bitcoin.

Built on a distributed ledger technology called blockchain, Bitcoin has lost about 70 per cent of its value since hitting an all-time high of US$19,783.21 in mid-December, while other cryptocurrencies have suffered similar gut-wrenching declines.

Lisa Kramer, a professor of finance at the ��߲ݴ�ý Mississauga, says the rapid run-up in cryptocurrency prices since last fall had all the hallmarks of a bubble, and that eager investors are continuing to make some classic missteps in response to plummeting prices.

“Cryptocurrencies arguably have no fundamental value,” Kramer wrote in a recent Globe and Mail op-ed, “and so when the hype fades and alleged instances of fraud are uncovered, there is no basis for prices to stay at their stratospheric heights.

“Investors staring at the sea of red on their balance sheets might take some lessons from behavioural finance.”

Those lessons include avoiding the temptation to hang on to poorly performing individual securities in the hope one’s fortunes will turn around. But Kramer argues cryptocurrency investors “have bought wholeheartedly” into this bias, which is distinct from buying or holding a diversified portfolio of stocks and bonds. There's even an online shorthand for the strategy dubbed “HODL,” which implores investors to “hold” their tokens and resist selling in the face of plunging prices.

HODL is underpinned by a powerful element of human nature, according to Kramer.

“The biggest factor is likely loss aversion, the notion that losing a dollar hurts at least twice as much as gaining a dollar feels good."

Another contributing factor to HODL is the fallacy of sunk costs, or the idea you're better off “doubling down” on a losing wager in the hopes of making your money back. This is also known as throwing good money after bad, Kramer writes.

Many cryptocurrency investors may also be suffering from confirmation bias, seeking out information that confirms what they already believe to be true.

“In cryptocurrency circles,” Kramer says, “believers congregate in chat rooms and other echo chambers where naysayers are ridiculed and promotional news stories are celebrated to the exclusion of critical analysis.”

The solution? Kramer says realize that to err is human and learn from your mistakes – and then take deliberate steps not to repeat them.

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Read more in the Globe and Mail

Lots of options for socially conscious investors, U of T finance professor writes in the Globe and Mail

Read the Globe and Mail article

Know when to FODL'em: U of T expert says Bitcoin investors need to learn from their mistakes

Read Lisa Kramer's op-ed in the Globe and Mail