Finance Panel

The Clark Center for Global Markets explores finance professors’ views on vital policy issues via our Finance Panel. We regularly poll over 40 individuals on a range of timely and relevant topics. Panelists not only have the opportunity to respond to a poll’s statements, but an opportunity to comment and provide additional resources, if they wish. The Clark Center then shares the results with the public in a straightforward and concise format.

Please note that from September 2022, the language in our polls will use just two modifiers to refer to the size of an effect:

‘Substantial’: when an effect is large enough that it would make a difference that matters for the behavior involved.
‘Measurable’: when the direction of the effect is clear, but perhaps experts would differ as to whether it is substantial.

Private Credit

Finance

Private Credit

Question A:

The large increase in the market for private credit as a substitute for bank finance substantially reduces systemic risk.

Responses

10%

33%

44%

10%

Source: Clark Center Economic Experts Panel
Methodology

Question B:

The growth in private credit is substantially higher because of regulations that disincentivize banks from lending to below investment grade private businesses.

Responses

10%

23%

56%

Source: Clark Center Economic Experts Panel
Methodology

Banking

September 12, 2024

Abnormal Returns and Active Portfolio Management

Finance

Abnormal Returns and Active Portfolio Management

It is appropriate advice for retail investors to tilt their portfolio away from the market portfolio towards factors that have been identified in the academic literature to earn positive abnormal returns relative to the Capital Asset Pricing Model.

Responses

18%

15%

28%

33%

Source: Clark Center Economic Experts Panel
Methodology

Economists, Economic Theory, & Economic Organizations

September 4, 2024

Effects of End-of-Day Trading

Finance

Effects of End-of-Day Trading

In this Finance survey: Stock markets around the world have seen an increasing concentration of trades in or near the closing auction. In the US, for example, about a third of all S&P 500 stock trades are now executed in the final ten minutes of the session, up from 27% in 2021 (a) The increased concentration of trading in the final minutes of the trading day has a measurably detrimental effect on market quality; (b) Strict indexing implemented with trading at the close to avoid tracking error creates a measurable performance drag that could be avoided with more flexible passive strategies

Investment Management

August 9, 2024

Corporate Social Responsibility

Finance

Corporate Social Responsibility

This Finance survey examines (a) Public companies that pursue social and environmental initiatives bear no measurable costs (in terms of lower profits) relative to similar companies that do not pursue such initiatives; (b) Public companies that pursue social and environmental initiatives benefit from a measurably lower cost of capital than similar companies that do not pursue such initiatives; (c) There are substantial social benefits when managers of public companies make choices that account for the impact of their decisions on customers, employees, and community members beyond the effects on shareholders

Business, Management, & Corporate Performance

July 19, 2024

Publicly Traded Firms, Private Firms and the Economy

Finance

Publicly Traded Firms, Private Firms and the Economy

This Finance survey examines (a) The lower willingness of private firms to go public, combined with the increased number of publicly traded firms being taken private over the last 25 years, is measurably net negative for economic growth; (b) All else equal, reducing regulatory barriers (including reporting requirements such as Sarbanes Oxley 404) to public listing would substantially increase the share of publicly traded firms in the economy; (c) The lack of transparency about unlisted private firms' financial performance substantially hinders the efficiency of the allocation of capital

Business, Management, & Corporate Performance

July 3, 2024

Quarterly Earnings

Finance

Quarterly Earnings

This Finance survey examines (a) Letting publicly traded firms report earnings annually rather than quarterly would lead their executives to place more weight on long-term issues in their investments and other decisions; (b) A switch from quarterly to annual earnings reports would, on net, benefit shareholders

Business, Management, & Corporate Performance

June 20, 2024

Foreign Exchange Interventions

Finance

Foreign Exchange Interventions

This Finance survey examines that it seems likely that Japanese authorities intervened in the foreign exchange market recently to prop up the yen – see, for example: https://www.ft.com/content/455784ec-0465-46ee-8c73-fc5ce3e31c37. In such circumstances, intervention refers to purchases or sales of domestic or foreign currency without changing the monetary policy stance (a) Large-scale intervention by public authorities in currency markets can move exchange rates substantially (b) The effectiveness of foreign exchange interventions can last beyond one month

International Finance

May 30, 2024

Retail Investor Participation in Private Equity

Finance

Retail Investor Participation in Private Equity

This Finance survey examines that Retail investors account for a large share of global wealth, but a small share in private equity holdings. (see link: https://bain.com/insights/why-private-equity-is-targeting-individual-investors-global-private-equity-report-2023/ (a) A reduction in the barriers to all retail investors investing in private equity funds - notably regulatory restrictions on investor wealth/income and on liquidity - would substantially improve household welfare.

Financial Regulation

May 15, 2024

Passive Investors and US Banks

Finance

Passive Investors and US Banks

This Finance survey examines: Regulator Probes BlackRock and Vanguard Over Huge Stakes in U.S. Banks – The WSJ reports that ‘The FDIC is scrutinizing whether the index-fund giants are sticking to passive roles when it comes to their investments in U.S. banks.' (a) The exemption of passive asset managers from banking rules - such as needing permission when they acquire shares above the 10% threshold - generates measurable risks to the accomplishment of the FDIC's mission

Banking

April 16, 2024

Short Selling and Asset Values

Finance

Short Selling and Asset Values

This Finance survey examines (a) Allowing short selling of financial securities, such as stocks and government bonds, leads to prices that, on average, are closer to their fundamental values; (b) When short sellers start to establish substantial short positions in a stock, the stock is likely to have been overvalued; (c) Requiring investors to disclose short positions in a stock at the equivalent threshold as they are required to do for long positions would improve the informativeness of stock prices

Financial Markets & Banking

March 26, 2024