Tip Sheet: University of Virginia Experts on the Financial Crisis

December 01, 2008

December 1, 2008 — BusinessWeek judges the University of Virginia's McIntire School of Commerce to be in a "virtual dead heat" with University of Pennsylvania's Wharton School as the best undergraduate business school in the country. U.Va.'s separate graduate business school, the Darden School of Business, is also highly ranked. Together they have more than a dozen faculty who are regularly featured in national and international media discussing the financial crisis, from problems with the bailout strategy to global capital flows and America's low savings rate, to lessons from past financial crises. They are listed below by areas of expertise.

Big-picture and history of financial crises and bailouts

Robert F. Bruner
Dean of the Darden School of Business, University of Virginia
Distinguished Professor of Business Administration
434-924-7481 (office)
Blog: www.darden.edu/html/deansblog.aspx

Author of seven books and an expert in several areas of finance, including financial crises and mergers and acquisitions, Bruner has been widely quoted in the past three years. Major media seek him out for stories about the current financial crises. He often provides big-picture lessons and historical context, drawing on his recent book, "The Panic of 1907: Lessons Learned from the Market's Perfect Storm," which examines a financial crisis that bears remarkable similarity to today's turbulence. Among the lessons: "the current crisis overshadows previous crises in four key ways: complexity, inflexibility, speed and scale."

Recent quotes:

Commentary: A global fix for the next financial panic
CNN / Oct. 29

Intervention Is Bold, but Has a Basis in History
New York Times / Oct. 14

Bailouts, Then and Now
NPR's "On Point" / Oct. 6

The bailout, banking, the credit crunch

David C. Smith
Associate Professor of Commerce
Director, McIntire Center for Financial Innovation
Web site: commerce.virginia.edu/faculty_research/staff_directory/smith,dc.html
Formerly an economist at the Federal Reserve focused on international financial architecture, Smith studies corporate finance and banking, including bankruptcy, corporate governance, loan restrictions and renegotiations, and the impact of credit rationing on small business. Smith supports the recent public purchase of bank stock as part of the $700 billion bailout.

Recent quotes:

Treasury bids to free up lending with cash infusion to banks
USA Today / Oct. 15

The question now: Will bailout plan work?
USA Today / Sept. 29

Peter Rodriguez
Associate Professor of Business Administration
Associate Dean for International Relations
Director, Tayloe Murphy International Center
Web site: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=4377

Trained as an economist — having studied at Princeton under current Federal Reserve Chairman Ben Bernanke — Rodriguez focuses on international business, energy, trade and economic development, with an emphasis on corruption. Prior to his teaching career, he worked in the Global Energy Group at JP Morgan Chase. He has been widely quoted regarding the effects of Katrina on the economy, gasoline prices, the housing market and other economy-related issues in the national media.

Recent quotes:

Perhaps $700 billion is 'too many zeros'
Richmond Times Dispatch / Oct. 2

Why U.S. job market has not plunged
Christian Science Monitor / May 5

Savings, thrift, consumption tax

Ronald Wilcox
Professor of Business Administration
Blog: http://usthrift.wordpress.com/

A former economist for the U.S. Securities and Exchange Commission, Wilcox often speaks to the media in connection with his recent (and timely) book, "Whatever Happened to Thrift: Why Americans Don't Save and What to Do about It." As he explains in his book and his blog, there are a number of measures that could make it easier for people to save, from helping the smallest companies offer 401(k) plans (and opt employees into them by default) to replacing the income tax with a consumption tax. America's debt addiction is partly a byproduct of American optimism, explains Wilcox, but it is exacerbating the current economic downturn.

Recent quotes:

A return to thrift
Washington Post / Fortune Magazine / Oct. 21

Commentary: How To Save The Economy / It's simple — save your money.
Forbes / Nov. 11

Financial markets, futures, trader behavior, credit default swaps

Robert Webb
Professor of Commerce
Web site:  http://commerce.virginia.edu/faculty_research/staff_directory/Webb.html

Webb's expertise in financial markets is rooted in his years as a futures trader on the Chicago Mercantile Exchange, where he designed new types of futures contracts, and later served as a senior economist. As editor of the Journal of Futures Markets and author of "Trading Catalysts: How Events Move Markets and Create Trading Opportunities," he is a leading expert on the nuances of financial markets, trader behavior, and complex financial instruments like credit default swaps. He has worked for the Executive Office of the President, the Office of Management and Budget and the Commodity Futures Trading Commission. He commented recently that commodity index traders probably did not drive up oil prices this summer.

Recent quotes:

Credit Market Answer / Derivatives Fix Eyed
New York Post / Oct. 8

Index Traders Cut Oil Positions This Year, CFTC Says
Bloomberg / Sept. 11

Regulation of financial markets

Paul G. Mahoney
Dean of the School of Law
Distinguished Professor of Law
Web site: http://www.law.virginia.edu/lawweb/Faculty.nsf/FHPbI/2477

Mahoney's landmark 1997 study of the self-regulation of financial markets argued that privately run markets have a self-interest in safeguarding investors, beginning a shift in support among academics for financial market self-regulation. He teaches and researches securities regulation, law and economic development, corporate finance, financial derivatives and contracts. He previously practiced corporate law in New York City and clerked for U.S. Supreme Court Justice Thurgood Marshall. Mahoney is a member of the Council on Foreign Relations and has served as an associate editor of the Journal of Economic Perspectives and as a director of the American Law and Economics Association.

Recent quotes:

CSX vote delay — desperate gamble or shrewd move?
Reuters / The Guardian (London) / June 26

Getting Business School Skills While in Law School
U.S. News & World Report / Mar. 26

In the stocks / Shame Fills a Vacuum in China's Financial Law Enforcement
Economist / Feb. 28

Investment banking, hedge funds, private equity, corporate finance

William J. Wilhelm Jr.
Professor of Commerce
434-924-7666 (office)
434-244-6363 (home)
Web site: http://commerce.virginia.edu/faculty_research/staff_directory/Wilhelm.html

An expert on financial markets and institutions, Wilhelm's most recent book is a history of investment banking: "Investment Banking: Institutions, Politics, and Law," which provides an economic rationale for the dominant role of investment banks in the capital markets.  He comments frequently on hedge funds, boutique investment firms, and the future of investment banking.

Recent quotes:

The Nation: Those Other Guys on the Street
New York Times / Sept. 28

Wall Street model broken by credit crisis
Reuters / Sept. 15

Susan Chaplinsky
Professor of Business Administration
Associate Dean for Faculty Scholarship
Web site: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=4109

Chaplinsky studies private equity firms and how they have come to control a much larger share of our economy in recent years. Her other areas of expertise include raising capital, corporate finance, employee stock ownership plans, investment banking and valuation.

Recent quotes:

Private equity in a market freeze
NPR's Marketplace / Oct. 29

Kenneth Eades
Professor of Business Administration
Web site: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=4277

Eades' research focuses on corporate finance issues, including dividend policy, mergers and acquisitions, investments, defined benefit pensions and pricing of convertible securities. The author of more than 50 Darden cases, Eades has received both research and teaching awards and teaches a business class to U.Va. law students.

Recent quotes:

Wells Fargo tops Citigroup Wachovia bid
Richmond Times Dispatch / Oct. 4

Interest rates, Federal Reserve, international capital flows

Francis Warnock
Associate Professor of Business Administration
Web site: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=4366

Warnock developed his expertise in international capital flows as a senior economist at the Federal Reserve, following private sector work for Merrill Lynch in Vienna, Austria and as a commodity trader on Wall Street. He currently serves as a senior fellow at the Federal Reserve Bank of Dallas' Globalization & Monetary Policy Institute. He co-authored influential and often-cited research for the Federal Reserve finding that U.S. long-term interest rates would be 1 percentage point higher without demand from foreign governments and central banks. 

Recent quotes:

Bernanke Push for Lower Rates Drives U.S. Yields Up

Bloomberg / Nov. 3

B-Schools: Perspective on Financial Crises
BusinessWeek / Sept. 18

Mortgages — subprime, renegotiation, valuation, liability
Richard F. DeMong
Virginia Bankers Professor of Bank Management
Director, Center for Financial Services Studies
Web site: http://commerce.virginia.edu/faculty_research/staff_directory/DeMong.html

DeMong is an expert on mortgages (prime, subprime, etc.), bank investment strategies, equity valuation and financial management of private companies. Published papers include "Mortgage Pricing Is Based on Risk" and "Prepayment Fees Lead to Lower Interest Rates." As a free market advocate, in 2004 he testified before Congress against assignee liability laws, which would have allowed home mortgage borrowers to sue anyone holding paper on their loan, from the originators who sold it to them to the Wall Street investment bankers who ultimately funded it. Supporters contest that such laws would have put the brakes on subprime lending.

Recent quotes:

Politicians, lobbyists shielded financiers / Lack of liability laws fueled firms' avarice Seattle Post
Intelligencer / Oct.10

State's banks on solid ground, official says
Roanoke Times / July 16

Tax law, tax issues

George Yin
Distinguished Professor of Law and Taxation
Web site: http://www.law.virginia.edu/lawweb/Faculty.nsf/FHPbI/4046

Yin comments routinely on tax issues related to the financial crisis, drawing on his experience as chief of staff for Congress's Joint Committee on Taxation, one of the most influential tax positions in the country, from 2003-05, after having previously worked for the Senate Finance Committee. He has been critical of recent closed-door regulation changes by Treasury Secretary Henry Paulson that let healthy banks buy weak ones and take big tax write-offs for the weak banks' losses. He offers even-handed, pragmatic analysis on the pros and cons of various tax reform proposals.

Recent quotes:

Editorial: Little-noticed tax change hands billions more to banks
USA Today / Nov. 14

A Quiet Windfall For U.S. Banks / With Attention on Bailout Debate, Treasury Made Change to Tax Policy
Washington Post / Nov. 10

Don't Expect Too Many Jobs From Tax Proposals
Wall Street Journal blog / Oct. 28

Crisis big picture, business law

George Geis
Professor of Law
434-243-2341 (office)
205-310-1986 (mobile)
Web site: http://www.law.virginia.edu/lawweb/Faculty.nsf/PrFHPbW/ggeis
Geis is an expert in business law whose research focuses on business alliances, corporate finance, contract theory, and mergers and acquisitions. He is a former management consultant with McKinsey & Company and has worked for law firms in New York and Los Angeles.

Geis' take on how the crisis is evolving: "Recent challenges in the U.S. turnaround plan reflect three stark facts: one, we have clearly moved beyond a liquidity crunch into real economic pain; two, no one knows the exact route back to solid ground; and three, the global nature of the problem is accelerating 'pass the plate' strategies as each country reacts to the policy choices of its neighbors."

Politics of the bailout, the global economy, and the U.S. auto industry

David Leblang
J. Wilson Newman Professor of Governance
Professor of Politics
Web site: http://millercenter.org/about/staff/leblang

Leblang is a faculty associate in the Governing America in a Global Era program of U.Va.'s Miller Center of Public Affairs. A specialist in political economy, Leblang has served as a consultant to the International Monetary Fund, the Directorate of Finance and Economics of the European Commission, and the Department of Defense. He co-authored, "Democratic Politics and Financial Markets: Pricing Politics" (2006). He has written on the politics of economic growth, the determinants of exchange rate policy, the causes of currency crises and the link between elections and economic expectations.

Recent quotes:

Editorial: Reconsidering ownership
Charlottesville Daily Progress / Oct. 26

Herman Schwartz
Professor of Politics
434-227-0180 (mobile)

Schwartz specializes in the politics of the global economy, including detailed studies of various industries (automobiles, aircraft, semiconductors and biotech) in the U.S., other industrial countries and developing nations. His well-known book, "States vs. Markets: The Emergence of the Global Economy" (2000), was recently translated into Chinese. He has written a forthcoming book, "Subprime Nation: American Power, Global Capital and the Housing Bubble" (expected Aug. 2009).  He discussed themes from that book at a U.Va. event in February. Event video at: http://millercenter.org/scripps/archive/colloquia/detail/3864.