Clark Center Forum

Widely cited as the father of the efficient market hypothesis and one of its strongest advocates, Professor Eugene Fama examines his groundbreaking idea in the context of the 2008 and 2009 markets. He outlines the benefits and limitations of efficient markets for everyday investors and is interviewed by the Chairman of Dimensional Fund Advisors in […] 

July 2009 Retirement saving is undergoing a fundamental change as employers shift from defined benefit pension plans to defined contribution plans, such as 401(k) accounts. Defined contribution plans have important advantages: they allow households to customize their retirement saving to their own risk preferences and circumstances, they insulate pensioners from potential bankruptcies of their employers, […] 

Paola Sapienza and Luigi Zingales Forbes, July 29th, 2009 The word for “crisis” in Chinese, weiji, is written with two characters: one (wei) means danger; the other, ji, means opportunity. That’s because every crisis challenges the status quo and in so doing creates the opportunity for something new to emerge. “This process of Creative Destruction,” […] 

Yahoo! Finance, July  20, 2009 Professor Zingales talks to Yahoo! Finance about what Wall Street will look like in 2015; a new mortgage plan; and CIT Group’s rescue plan. CIT Rescue Plan Proves Capitalism Works Wall St. in Danger of Losing Its Crown as King of Finance Time for a New Morgage Plan 

City Journal, Spring 2009 The American system of financial regulation is a patchwork of agencies. At least ten federal regulators oversee financial-services companies; different regulators sometimes supervise the same entities; and since the onset of the financial crisis, regulatory agencies have taken on roles not originally envisioned or mandated, leading to further redundancy. This patchwork […] 

Credit default swaps (CDS) are contracts that provide protection against the risk of default by borrowers. The buyer of the CDS makes periodic payments to the seller, and in return the buyer will receive a payoff if the borrower defaults, analogous to an insurance contract. While credit default swaps can be a valuable tool for […] 

Forbes, July 13th, 2009 New York’s preeminent industry has changed forever In the 15th and 16th centuries, Florence, Genoa, and Venice were the financial capitals of the Western world.  When they declined, financial leadership shifted to Amsterdam, then to London and finally to New York, whose supremacy went unchallenged from 1945 until the end of […] 

Financial Times, June 29th, 2009 Buried within the 88-page Obama administration proposal to overhaul financial regulation is an overlooked option called a “rapid resolution plan”. It mandates that systemically important financial companies be required regularly to file a “funeral plan”: a set of instructions for how the institution could be quickly dismantled should the need […] 

Luigi Guiso, Paola Sapienza, and Luigi Zingales The Economist, June 26th, 2009 Professors Zingales, Sapienza, and Guiso’s new research examines American homeowners’ propensity to default when the value of a mortgage exceeds the value of their house, even if they can afford to pay their mortgage. Read Economist article> For additional information, please see Professors […] 

Wall Street Journal, June 25th, 2009 Using research funded by the Initiative on Global Markets at the University of Chicago’s Booth School of Business, Professors Atif Mian and Amir Sufi argue that the “rise in house prices from 2002 to 2006 was a main driver of economic growth during this time period, and the subsequent […]