Christmas Cheer with Alumni

Three of our graduating students last week had further reason to celebrate as they became the 2012 recipients of three exclusive ICMA Centre awards.

The large fine imposed on RBS last week suggests that a ‘scandal’ took place in the banking world over the setting of LIBOR. Yes – there was probably systematic mis-pricing of LIBOR which enabled some traders and some banks to profit at the expense of others. But the LIBOR issue simply highlights a much wider problem in financial markets which is that many ‘prices’ quoted in markets are not market prices at all. Instead they are prices based on computer models, matrix pricing or sheer guesswork, which may or may not produce ‘accurate’ prices. The reason for using computers models and guesswork is that in many financial products there actually are no transactions at all or very few even over periods of some weeks or months and thus no market prices.

Dr Abdolhossein (Pejman) Zameni has been awarded Best Paper by the Malaysian Finance Association (MFA) for his paper “Substantial Shareholders and Their Trading Behaviour Around Lock-Up Expiry: Evidence from Emerging Markets”.