Journal Detail

Journal 31: Cass-Capco Institute Paper Series on Risk - 4th Edition

March 2011

This edition of the Capco Journal aims to introduce some of those ideas that we feel will be part of the foundations of tomorrow’s finance. A number of articles in this issue of the Journal question the accepted logic of academic finance and submit ideas that financial institutions and regulators could actually use in their work. This edition is consequently of immense value. It sets a new benchmark for the publication of future articles: the need for the ideas presented to be of practical use.

Exactly ten years ago, we published the first edition of the Journal. Our objective at the time was to establish a publication that allowed senior financial executives to keep abreast of the latest thinking in finance in a format that they could read and understand. That remains our objective today.

However, we did not envision at the time that we would face a situation where a good number of the established theories in finance would come under such severe criticism and that we would be forced to rebuild the discipline with a new body of knowledge. The two major crises that we witnessed since the inception of the Journal have slowly eroded our trust in financial models, and specifically in how risk is measured and managed.

Today, we find ourselves in a situation where our industry is heavily criticized for its actions and responsibilities during these two crises. It is now time to move on and to think about how we can come together to rethink traditional finance, and its many complex supporting models. It is now time that we recognize that finance academics have as much to learn from practitioners as the latter did from the former. It is also time we start looking forward and begin to develop ideas that can make our industry stronger and more resilient against future crises. The time for looking back is over.

This edition of the Journal aims to introduce some of those ideas that we feel will be part of the foundations of tomorrow’s finance. This is also the first edition in which practical finance receives as much attention as it deserves.

We hope that you will join us on this journey of discovery and help us form the future of finance.

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