Christine Parlour image

Christine Parlour

29 Votes

Berkeley Haas

  • Berkeley, CA

About

  • Sylvan C. Coleman Chair of Finance and Accounting
  • FMA 2020 Best FinTech Paper
  • Bank of Canada “Visiting Scholar” (2020-2022)

Voting History

Finance

Sovereign Wealth Funds

Question A: Establishing a sovereign wealth fund to invest in domestic infrastructure, emerging technologies, and/or strategic sectors would bring substantial benefits to the US economy over a ten-year horizon.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
6
Disagree
6
Comment: Depends on how the fund is structured and financed.
Question B: For the US, establishing a sovereign wealth fund would be substantially better for citizens relative to reducing public debt burdens.
Vote Confidence Median Survey Vote Median Survey Confidence
No Opinion
Disagree
6
Finance

Cryptocurrency

Question A: A bitcoin's value derives from the belief that others will want to use it, which implies that its purchasing power is likely to fluctuate over time to a degree that will limit its usefulness.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
8
Agree
7
Comment: As a non-dividend paying asset, the primary source of value is resale. Other experiments such as lightning are a potential source of use value,
Question B: A substantial source of the value of unbacked decentralized private cryptocurrencies, such as Bitcoin, arises from their convenience for use in illegal activities.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
8
Agree
6
Comment: Eth value partially derives from being a platform token. The pseudo-anonymous nature of most chains means illegal transactions can be tracked.
Question C: A properly diversified portfolio should include crypto assets.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
9
Disagree
7
Finance

Trends in Banking

Question A: The trend of consolidation in the US banking sector will lead to fewer, but more profitable, mega-banks with over $250 billion in assets dominating the market.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
7
Agree
6
Comment: GSIBs have regulatory advantages
Question B: The current liquidity and capital regulations are inadequate to address run risks of banks in a digital era.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
8
Uncertain
6
Comment: Liquidity requirements are based on historical shocks, as the nature of the industry changes so will the sensitivity of deposits to shocks.
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.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Uncertain
7
Question A:

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.

The increased concentration of trading in the final minutes of the trading day has a measurably detrimental effect on market quality.

Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
9
Uncertain
5
Comment: Given that agents can choose when to trade, market quality is complex to measure. Trading at the same point in time can be efficient.
Question 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.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
8
Uncertain
6
Comment: Unclear that price impact at the close is higher than at other times.
Question 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.
Vote Confidence Median Survey Vote Median Survey Confidence
Disagree
7
Disagree
7
Comment: Firms are adding an extra constraint.
Question 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.
Vote Confidence Median Survey Vote Median Survey Confidence
Strongly Disagree
8
Uncertain
7
Comment: Cost of capital is determined by the capital markets.
Question 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.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
7
Agree
7
Comment: Stakeholder benefits are measured in social benefits
Question 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.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
6
Uncertain
6
Comment: Unclear how large financial constraints are
Question 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.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
7
Agree
7
Question C: The lack of transparency about unlisted private firms' financial performance substantially hinders the efficiency of the allocation of capital.
Vote Confidence Median Survey Vote Median Survey Confidence
Disagree
7
Uncertain
6
Comment: Unclear if firms are opaque to relevant investors
Finance

Quarterly Earnings

Question 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.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Disagree
7
Question B: A switch from quarterly to annual earnings reports would, on net, benefit shareholders.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Disagree
7
Question A: 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.

Large-scale intervention by public authorities in currency markets can move exchange rates substantially.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Uncertain
5
Question B: The effectiveness of foreign exchange interventions can last beyond one month.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Disagree
5
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 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.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
8
Disagree
7
Comment: Implementation will be important. There are obviously large diversification/wealth benefits for smaller investors.
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.’

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.
Vote Confidence Median Survey Vote Median Survey Confidence
Disagree
7
Disagree
7
Comment: Passive holdings are imputable to observable flows.
Question 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.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Agree
8
Question B: When short sellers start to establish substantial short positions in a stock, the stock is likely to have been overvalued.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Agree
7
Question 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.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Agree
6
With some measures of concentration by market capitalization within broad US stock market indices at an all-time high, investors seeking a well-diversified passive equity portfolio should consider alternatives to market-cap-weighted indices.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Disagree
7
Finance

Tesla

Tesla shareholders are likely to benefit substantially from the decision by the Delaware Court of Chancery to void Elon Musk's $56 billion remuneration package.
Vote Confidence Median Survey Vote Median Survey Confidence
Disagree
7
Disagree
6
Comment: Absence a friction, courts intervening into market outcomes tend to make people worse off.
On 10 January 2024, the SEC approved spot Bitcoin exchange-traded products:
https://www.sec.gov/news/statement/gensler-statement-spot-bitcoin-011023\

The SEC's approval of spot Bitcoin exchange-traded products makes investors overall measurably better off.
Vote Confidence Median Survey Vote Median Survey Confidence
Strongly Agree
10
Uncertain
7
Comment: Consumer will now have access to BTC through a regulated exchange. This should reduce intermediation fees.
The Biden Administration's recommendation to lower the real discount rate used in the cost and benefit analysis of federal regulations to 2 percent (from the current levels of 3 or 7 percent) will substantially improve regulatory analysis.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Uncertain
6
Finance

Modern Portfolio Theory

Question A: Harry Markowitz, the Nobel Prize-winning pioneer of modern portfolio theory, passed away earlier this year:
https://afajof.org/news/in-memoriam-harry-markowitz-past-president-of-the-american-finance-association-1927-2023/

Application of the principles of modern portfolio theory allows investors in practice to achieve substantial improvements in the risk-expected return trade-off relative to naive strategies such as equal-weighting that do not take account of return covariances.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
8
Agree
8
Comment: In practice many "optimized" portfolios are subject to constraints (rebalancing costs/short selling). Depending on the number of constraints, outcomes will look like the simple heuristic.
Question B: Widespread adoption of modern portfolio theory by investors has substantially improved the efficiency of capital allocation in financial markets.
Vote Confidence Median Survey Vote Median Survey Confidence
Strongly Agree
9
Agree
7
Comment: Portfolio theory led to the design of ETFs and mutual funds which increased participation and capital market depth.
Question A: The Federal Reserve has begun quantitative tightening (QT) to reduce the size of its balance sheet. Fed holdings of Treasury securities have declined by $800 billion relative to the March 2020 peak. The Fed currently holds $4.9 trillion of Treasury securities, significantly larger than the $2.5 trillion holdings prior to the Covid pandemic.

A reduction in Fed holdings of Treasury securities measurably increases the interest rate on long-term U.S. Treasury bonds.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
5
Agree
6
Comment: The optimal size of the balance sheet is an area of active research
Question B: A reduction in Fed holdings of Treasury securities measurably increases volatility in the Treasury market.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
5
Uncertain
6
Comment: Volatility is affected by the market's understanding of the action and fundamental frictions.
Question A: September 2023 was the 25th anniversary of the collapse of Long-Term Capital Management (LTCM). In response to LTCM's troubles, the Federal Reserve orchestrated a multi-billion dollar rescue package by a consortium of banks and it cut the Federal funds rate target by 75 basis points within six weeks.

The hedge fund sector's contribution to systemic risk is substantially lower today than at the time of LTCM.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Uncertain
6
Question B: Financial market participants' expectation that the Fed will aggressively ease monetary policy in response to financial market dislocations is a substantial source of financial instability.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Uncertain
6
Question A: SEC Announcement: https://www.sec.gov/news/press-release/2023-155

The benefits of the new SEC rules on private funds - which require private funds to provide transparency to their investors regarding the fees and expenses and other terms of their relationship with private fund advisers and the performance of such private funds - substantially exceed their costs.
Vote Confidence Median Survey Vote Median Survey Confidence
Disagree
8
Disagree
6
Comment: Investment vehicles can be complicated and transparently describing costs may be difficult.
Question B: The new SEC rules will have a substantially negative impact on the industry by stifling capital formation and reducing competition.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
8
Disagree
6
Comment: The costs will disproportionally affect smaller managers or those who are developing non-traditional assets.
Question C: It is appropriate policy for the SEC to impose such rules on private funds even though the investors (limited partners) are sophisticated entities.
Vote Confidence Median Survey Vote Median Survey Confidence
Strongly Disagree
9
Uncertain
7
Comment: The resources of the SEC are limited and best used to protect retail investors.
Question A: New Money Market Fund (MMF) Rules: The SEC adopted amendments to the MMF rules, including a new mandatory liquidity fee for institutional prime and tax-exempt funds. The liquidity fee would trigger when daily net redemptions exceed five percent and when the costs associated with such redemptions are more than de minimus. https://www.sec.gov/news/press-release/2023-129

The new liquidity fee will substantially reduce the likelihood of runs on MMFs.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
8
Disagree
6
Question B: The new liquidity fee will cause a substantial shift of assets under management from institutional prime and tax-exempt funds to government MMFs (which are exempt from the fees).
Vote Confidence Median Survey Vote Median Survey Confidence
Strongly Agree
9
Disagree
7
Question A: The impact of the Covid-19 pandemic on working and shopping habits has not been fully priced into current private valuations of downtown commercial properties in major cities.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
5
Uncertain
6
Question B: A continued fall in commercial real estate valuations would trigger another round of banking panic.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
4
Uncertain
6
Finance

ESG Factors

Question A: Regulation that allows state pension funds to consider environmental, social, and governance factors in investment decisions only if these factors are material for risk and expected return would make retirees measurably worse off.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Disagree
5
Question B: Regulation that prevents state pension funds from considering environmental, social, and governance factors in investment decisions even if these factors are material for risk and expected return would make retirees measurably worse off.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Agree
7
Question A: Since maturity transformation is an inherent feature of commercial banks' business model, some duration mismatch between assets and liabilities is unavoidable.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
9
Agree
8
Comment: While banks do engage in maturity transformation, the extent to which they do so is a choice.
Question B: For the purposes of capital regulation, banks should be required to mark their holdings of Treasury and Agency securities to market at all times (even though their loans are not marked to market).
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
9
Uncertain
7
Comment: The extent to which duration risk on treasuries etc. is an issue depends on the composition of the banks' assets.
Finance

Discount Rates

Question A: Despite the empirical failures of the Capital Asset Pricing Model (CAPM) in explaining expected stock returns, a shareholder-value maximizing publicly-traded firm should still use the CAPM to calculate the cost of equity in capital budgeting.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
8
Uncertain
7
Comment: Multi-factor models would lead to more accurate estimates. However, the correct factors to use is opaque.
Question B: The equity risk premium that U.S. publicly traded firms should use in cost of equity calculations in April 2023 is above 6%.
Vote Confidence Median Survey Vote Median Survey Confidence
Strongly Disagree
8
Disagree
7
Comment: Although the estimates of the equity premium have changed over time, a lower number seems appropriate.
Finance

Banking Crisis

Question A: Financial regulators in the US and Europe lack the tools and authority to deter runs on banks by uninsured depositors.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
8
Disagree
7
Comment: We have a limited understanding of what triggers each bank run.
Question B: Not guaranteeing uninsured deposits at Silicon Valley Bank in full would have created substantial damage to the US economy.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
7
Uncertain
7
Comment: Increased the probability of bank runs on other banks.
Question C: Fully guaranteeing uninsured deposits at Silicon Valley Bank substantially increases banks’ incentives to engage in excessive risk-taking.
Vote Confidence Median Survey Vote Median Survey Confidence
Disagree
8
Agree
7
Comment: Excessive risk taking can be deterred by actions taken specifically against those who take the risk.
Question A: By issuing inflation-indexed bonds, and thereby providing a long-term real safe asset for pension funds and retirement savers, governments can make a substantial contribution to social welfare.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
7
Agree
7
Question B: Issuance of inflation-indexed bonds substantially helps government commit to a responsible fiscal and monetary policy.
Vote Confidence Median Survey Vote Median Survey Confidence
Disagree
7
Uncertain
6
Finance

Taxing Stock Buybacks

Question A: Large-scale stock buybacks by public corporations provide short-term rewards for shareholders and senior executives at the expense of potentially higher-return corporate investments.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
8
Disagree
8
Comment: It depends on the firms’ investment opportunities
Question B: The proposed higher tax on corporate stock buybacks (an increase from 1% to 4%) would generate substantial public revenues.
Vote Confidence Median Survey Vote Median Survey Confidence
Disagree
8
Disagree
7
Comment: Firms will adjust how they distribute earnings
Question C: The proposed higher tax on corporate stock buybacks would generate a substantial increase in corporate investment.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
7
Disagree
8
Comment: While investment may increase, it may be less productive investment.
Finance

Debt Ceiling

Question A: Missing payments on the US Treasury security obligations for several weeks would pose a substantial risk of a global financial crisis.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
6
Agree
6
Question B: The requirement to periodically increase the debt ceiling measurably reduces the long-run size of the debt.
Vote Confidence Median Survey Vote Median Survey Confidence
Strongly Disagree
1
Disagree
6
Question A: The SEC’s proposed new rule for stock orders from individual investors is likely to be effective in giving those investors better prices on their trades on average.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
10
Uncertain
5
Comment: Unclear that moving to trade-by-trade competition for some types of order flow improves market outcomes compared to the current lower frequency competition.
-see background information here
Question B: The new rule would improve the overall operation of the stock market.
Vote Confidence Median Survey Vote Median Survey Confidence
Strongly Disagree
10
Disagree
5
Comment: Markets are very complicated and segmentation of order flow often has equilibrium effects.
Question A: Although the reported volatility of asset values in private markets (private equity, buyouts, and venture capital) is lower than that of comparable assets in public markets, their true volatility is broadly similar or greater.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
8
Agree
8
Comment: There are obviously measurement/observation problems. There are substantial differences in the way in which prices are determined.
Question B: Since the global financial crisis, the realized returns on private equities have measurably exceeded the returns on public equities.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
5
Disagree
5
Finance

Cryptocurrency Exchanges

Question A: The collapse of a major crypto intermediary will have little impact on the wider economy and the stability of the traditional financial system.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
9
Agree
7
Comment: Institutional adoption of crypto is still limited, therefore there is little chance of contagion. I note that retail investors may lose substantial amounts.
Question B: The collapse of a major crypto intermediary suggests the need for the crypto asset class to be more tightly regulated.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
9
Agree
8
Comment: Intermediaries, irrespective of what they intermediate, should have oversight — either internal boards or regulation.
Finance

Passive Investing

The amount of passively invested funds has reached levels at which it has a measurable detrimental effect on market efficiency.
Vote Confidence Median Survey Vote Median Survey Confidence
Did Not Answer
Disagree
7
Question A: Research on the nature and impact of bank runs has made it possible to limit substantially the wider economic damage from financial crises.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
7
Agree
7
Question B: Reforms of financial regulation since 2008 (and macroprudential policies in some countries) will not substantially reduce the probability of financial crises.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
8
Uncertain
7
Finance

Currency Depreciation

Question A: The costs and risks associated with a sharp fall in the value of sterling outweigh any macroeconomic benefits for the UK of export stimulus due to a weaker currency.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
7
Uncertain
6
Comment: Capital flows much more rapidly than exports.
Question B: Concerns about government finances and debt sustainability can undermine the reserve currency status of a major currency.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
7
Agree
7
Comment: Sterling used to be a reserve currency until the size of the economy and the rise of the dollar undermined it.
Finance

Executive Pay

Question A: The typical chief executive officer of a publicly traded corporation in the U.S. is paid more than his or her marginal contribution to the firm's value.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
7
Uncertain
7
Comment: Very difficult to observe the marginal value and there is stickiness in compensation.
Question B: Mandating that U.S. publicly listed corporations must allow shareholders to cast a non-binding vote on executive compensation was a good idea.
Vote Confidence Median Survey Vote Median Survey Confidence
Agree
6
Uncertain
7
Comment: Reduces the cost to shareholders of monitoring and exercising governance rights.
Finance

Stakeholder Capitalism

Question A: Having companies run to maximize shareholder value creates significant negative externalities for workers and communities.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
8
Disagree
8
Comment: It depends on the industry. Some generate negative externalities (social and environmental), while others generate large consumer benefits.
Question B: Appropriately managed corporations could create significantly greater value than they currently do for a range of stakeholders – including workers, suppliers, customers and community members – with negligible impacts on shareholder value.
Vote Confidence Median Survey Vote Median Survey Confidence
Disagree
7
Disagree
8
Comment: Changing inefficient companies can increase value to various stakeholders. Changing efficient companies just moves value among groups.
Question C: Effective mechanisms for boards of directors to ensure that CEOs act in ways that balance the interests of all stakeholders would be straightforward to introduce.
Vote Confidence Median Survey Vote Median Survey Confidence
Strongly Disagree
9
Disagree
8
Comment: Incentives are agreed on before complex situations arise. Balancing all possible interests and future events is almost impossible.
Finance

Climate Reporting Mandate

Question A: A mandate for public companies to provide climate-related disclosures (such as their greenhouse gas emissions and carbon footprint) would provide financially material information that enables investors to make better decisions.
Vote Confidence Median Survey Vote Median Survey Confidence
Uncertain
7
Agree
7
Comment: Setting reporting guidelines that are effective and comprehensive is difficult.
Question B: A mandate for public companies to provide climate-related disclosures would provide material information that enables investors to make better decisions with regards to non-financial objectives (such as aiding portfolio choice based on ESG principles).
Vote Confidence Median Survey Vote Median Survey Confidence
Disagree
7
Agree
7
Comment: Once reporting requirements are promulgated, companies can easily re-organize their activities.
Question C: A mandate for public companies to provide climate-related disclosures would induce them to reduce their climate impact substantially.
Vote Confidence Median Survey Vote Median Survey Confidence
Disagree
7
Uncertain
6