In this fifth article in the Economists’ Hubris series, we investigate the practical applications of eight papers that won best-article awards in 2008 and 2009 from the Journal of Finance or the Journal of Financial Economics, the two leading journals in finance. We find that these articles...

This paper provides a taxonomy of market imperfections built around the economic forces underlying them. Market imperfections affect virtually every transaction in some way, generating costs which interfere with trades that rational individuals make, or would make in the absence of the...

This paper examines the results of a survey carried out in 2007 by the Bank of Italy concerning different characteristics of the organization of lending activities. Between 2003 and 2006 the physical distance between the headquarters and the branches increased, the limits to the decision-making...

The emergence of cloud banking in developing economies from billions of cell phones transacting both legal tender and informal units of accounts has created a need to reconsider habits of thinking about the nature of money and banking in advanced societies. The dysfunctional nature of modern...

The risk of compliance comes from the failure to comply with laws, regulations, rules, self-regulatory standards, and codes of conduct. This article focuses on the evolving scenario of the compliance function within banks, investment and insurance companies operating in Italy. We developed four...

The number of financial services firms that are using contact center offshoring has been on the increase in recent years. While this is a welcome trend, there are a number of pitfalls that they face. This paper will address the risks, rewards, and best practices in offshore contact center...

We believe that few of today's ASP/BSP in-sourcers have the correct economic and operational structures in place to withstand a few more years of a less than favorable economic environment. Consequently, we believe that many should reassess their business models to be able not only to survive...

The recent financial crisis has intensified the debate on optimal financial supervision architecture. A broad consensus has emerged around the view that an inadequate regulatory framework and a fragmented supervisory architecture, both nationally and internationally, has not only been at the...

Global players in the financial markets have discovered that excellent knowledge of the portfolio structure and the associated risks is a clear competitive advantage, and some have even started to focus their business on managing risky portfolios — not without considerable success, as this...

In this, the third paper in the Economists’ Hubris series, we highlight the shortcomings of academic thought in developing models that can be used by financial institutions to institute effective enterprise-wide risk management systems and policies. We find that pretty much all of the models...