Paul Woolley Centre
The Asset Management programme examines how different types of agents interact in financial markets; how asset prices are formed and relate to economic fundamentals; how price movements impact firms’ investment and the macro-economy; and how regulatory policies affect market outcomes and economic welfare. A large part of the research in the asset management programme is currently conducted within the Paul Woolley Centre---that research departs from the Arrow-Debreu view of frictionless markets and emphasizes the role of financial institutions and their managers’ incentives in influencing prices and allocations.
Finance and the Real Economy
The programme investigates the links between the financial sector and the development of the real economy. One area of research focuses on the effect of banking sector reform and the introduction of innovations in the bank financing of corporations and start-up firms, including through fintech solutions. A second area is the development of equity markets, from angel financing to private equity and stock market financing. A third area is the allocative efficiency role that financing plays to identify economic value. A fourth area is public procurement and the role that financial markets play in developing large public projects.
Systemic Risk Centre
Systemic risk encompasses the risk that the financial system fails to facilitate the safe and efficient allocation of financial resources needed to serve the real economy. It is the risk that the system is not working properly. In the systemic risk programme, currently structured around the ESRC-funded Systemic Risk Centre (SRC), we study such risks, which may also trigger or amplify the next financial crisis, and we seek to develop tools to help policymakers and financial institutions become better prepared and increase both resilience and effectiveness.
Governance, Entrepreneurship and Management
The programme focuses on the study of firms, from their origins and evolution to financing choices, internal organisation, and performance. One of its primary goals is to understand the specific challenges surrounding the birth of new firms, such as skills and traits of successful entrepreneurs, the environment conducive to their development, and the importance of different financial options available to fund start-ups (bank finance, angel finance, crowdsourcing, and venture capital). Another primary goal of the programme is to develop a better understanding of persistent performance differences across seemingly similar organisations, in particular how such differences correlate with financial policies, governance structures, and management practices.
Restarting the Economy after Covid: Financing
The Covid-19 crisis has brought many sectors of the global economy to a crawl. Governments have stepped in to provide much-needed support through job retention schemes, credit guarantees, tax deferrals and by speeding up procurement processes. Once the recovery is underway, debt financing becomes the main focus as many otherwise viable businesses will be saddled with significant debt. Governments themselves face debt sustainability issues, in particular in developing economies where fiscal space was scarce even prior to the crisis.