Richard Herring

Education

PhD, Princeton University, 1973; MA, Princeton University, 1970; BA, Oberlin College, 1968

Career and Recent Professional Awards; Teaching Awards

David Hauck Award for Outstanding Teaching, 1995; Undergraduate Division Excellence in Teaching Award, 1990, 1992, 1995

Academic Positions Held

Wharton: 1972present (Director, The Joseph H. Lauder Institute of Management and International Studies, 20002006; CoDirector, Wharton Financial Institutions Center, 2000present; Vice Dean and Director, Wharton Undergraduate Division, 19952000; Director, Financial Institutions Center, 198895; Director, Program in International Banking and Finance, 198288). Previous appointment: Princeton University. Visiting appointment: Johann Wolfgang Goethe University, Germany

Professional Leadership 20052009

Coeditor, BrookingsWharton Papers on Financial Services (20012004); Editorial Board, Journal of Financial Services Research, 19892000; Editorial Board, Journal of International Financial Markets, Institutions and Money, 19881998; Editorial Board, Research in Financial Services: Private and Public Policy Annual, 1991present; Editorial Board, Quarterly Review of the Federal Reserve Bank of New York, 1994present; Member, Shadow Financial Regulatory Committee, 1990present; CoChair, 2004present. Member, Multinational Banking Seminar, 19822005, American Chairman, 19922005. Financial Economists Roundtable, 2000present.

Corporate and Public Sector Leadership 20052009

Trustee, DWS Scudder Funds, 1990present. Trustee, Daiwa Country Funds, 2007present.

Richard J. Herring, C. Fernando, A. Subrahmanyam (2007), Common Liquidity Shocks and Market Collapse: Lessons from the Market for Perps, Journal of Banking and Finance, 2008. 10.1016/j.jbankfin.2007.11.011

Abstract: We show how a high degree of commonality in investor liquidity shocks can diminish incentives for intermediaries to keep markets open and lead to market collapse, even without information asymmetry or news affecting fundamentals. We motivate our model using the perpetual floatingrate note market where two years of explosive growth – in which issues by high quality borrowers were placed with institutional investors and traded in a liquid secondary market – were followed by a precipitous collapse when market intermediaries withdrew due to large order imbalances. We shed new light on the tradeoff between ownership concentration and market liquidity.

Richard J. Herring and N. Chatusripitak, “The Case of the Missing Market: the Bond Market & Why it Matters for Financial Development (2006)

Richard J. Herring (2005), Implementing Basel II: Is the Game Worth the Candle?, Financial Markets, Institutions & Instruments, Vol. 14, Number 5, 2005.

Abstract: In this article the author provides an extensive analysis of the various aspects of the Basel II Accord. Notwithstanding the gains from adoption of Basel II, he argues that these gains are unlikely to outweigh the costs of implementation and compliance: Basel II will be very costly for banks, home and host country supervisors, and, to the extent that it exacerbates macroeconomic cycles, to the broader economy as well.

Past Courses

FNCE220 INTERNATIONAL BANKING

This course focuses on international financial institutions and international banking activities. We will examine how current and historical events are reshaping the industry. We will focus on the basic analytics of managing a bank's exposure to liquidity, credit, market and country risk. In addition, we will consider how to evaluate and compare the risk exposures and performance of individual banks. Throughout the semester we will discuss public policy issues such as international debt crises and regulation.

FNCE399 INDEPENDENT STUDY

Integrates the work of the various courses and familiarizes the student with the tools and techniques of research.

FNCE732 INTERNATIONAL BANKING

This course focuses on international financial institutions and international banking activities. We will examine how current and historical events are reshaping the industry. We will focus on the basic analytics of managing a bank's exposure to liquidity, credit, market and country risk. In addition, we will consider how to evaluate and compare the risk exposures and performance of individual banks. Throughout the semester we will discuss public policy issues such as international debt crises and regulation.

FNCE899 INDEPENDENT STUDY

Independent Study Projects require extensive independent work and a considerable amount of writing. ISP in Finance are intended to give students the opportunity to study a particular topic in Finance in greater depth than is covered in the curriculum. The application for ISP's should outline a plan of study that requires at least as much work as a typical course in the Finance Department that meets twice a week. At a minimum, we need a description of the methodology you intend to employ, a bibliography and description of the data that you will use as well as a list of interim deliverables and dates to ensure that you complete the project within the semester. Applications for FNCE 899 ISP's will not be accepted after the THIRD WEEK OF THE SEMESTER. You must submit your Finance ISP request using the Finance Department's ISP form located at https://fnce.wharton.upenn.edu under the Course ISP section

Knowledge @ Wharton

Inflation, Interest Rates and ‘the Politics of Rage’, Knowledge @ Wharton 12/22/2016 The Causes of Systemic Risk — and Ways to Prevent Them, Knowledge @ Wharton 06/30/2016 Do Junk Bond Defaults Signal Trouble for 2016?, Knowledge @ Wharton 01/06/2016 How Germany Can Make or Break the Euro, Knowledge @ Wharton 03/17/2015 Are Eurozone Banks Now Good to Go?, Knowledge @ Wharton 11/04/2014 With Austerity Under Fire, Countries Seek a More Balanced Solution, Knowledge @ Wharton 05/22/2013 Big Banks Keep Watering Down Global Reserve Rules, Knowledge @ Wharton 05/01/2013 A Proper Accounting: The Real Cost of Government Loans and Credit Guarantees, Knowledge @ Wharton 12/05/2012 In or Out? The Case for — and Against — the American Stock Market, Knowledge @ Wharton 11/07/2012 In or Out? The Case for — and Against — the Stock Market, Knowledge @ Wharton 10/24/2012 New Reins at Citigroup, Knowledge @ Wharton 10/16/2012 A Premature Eulogy for Public Companies?, Knowledge @ Wharton 10/10/2012 Back to the Future: What’s at Stake for the Economy in the ObamaRomney Contest, Knowledge @ Wharton 09/12/2012 Should Big Banks Be Broken Up? Yes — or Maybe, Knowledge @ Wharton 08/29/2012 Is Flogging Bankers an Option?, Knowledge @ Wharton 07/31/2012 The LIBOR Mess: How Did It Happen — and What Lies Ahead?, Knowledge @ Wharton 07/18/2012 Bound for the Beach? Bring These Books…, Knowledge @ Wharton 06/26/2012 Indonesia’s Economy Is Surging Forward, but Challenges Abound, Knowledge @ Wharton 06/20/2012 The Specter of Default: How Safe Are U.S. Treasuries?, Knowledge @ Wharton 06/06/2012 Private Equity: Fact, Fiction and What Lies in Between, Knowledge @ Wharton 02/29/2012 Private Equity: Fact, Fiction and What Lies in Between, Knowledge @ Wharton 02/08/2012 Revisiting the American Dream: Is the U.S. Providing Fewer Opportunities to Get Ahead?, Knowledge @ Wharton 01/18/2012 Is It Time for a Trading Tax?, Knowledge @ Wharton 10/26/2011 Ten Years After 9/11 — Risk Management in the Era of the Unthinkable, Knowledge @ Wharton 09/09/2011 Why Standard & Poor’s Downgrade of U.S. Debt Was a Nobrainer, Knowledge @ Wharton 08/12/2011 Unheeded Lessons: What Did We Fail to Learn from the Financial Crisis?, Knowledge @ Wharton 07/20/2011 Bank Regulators Tighten the Screws Some, Knowledge @ Wharton 07/13/2011 Succession Planning at the IMF: Europe Against the Rest of the World?, Knowledge @ Wharton 05/25/2011 A Brief History of Modern Banking, Knowledge @ Wharton 05/16/2011 Nassim Taleb on Living with Black Swans, Knowledge @ Wharton 04/13/2011 Loss Leaders for Banks?, Knowledge @ Wharton 03/23/2011 Crude Reality: Why High Oil Prices Are Here to Stay, Knowledge @ Wharton 03/16/2011 Under the Microscope: AIG’s Second Chance, Knowledge @ Wharton 03/02/2011 Budget Blues: What Would State Bankruptcies Accomplish?, Knowledge @ Wharton 02/16/2011 Bouncing Back: How South Korea Is Taking the World by Surprise, Knowledge @ Wharton 01/11/2011 Basel III and Risky Banking Behavior: Too Little, Too Lenient, Too Late?, Knowledge @ Wharton 09/29/2010 Man the Barricades: Is a Trade War on the Horizon?, Knowledge @ Wharton 09/29/2010 Man the Barricades: Is a Trade War on the Horizon?, Knowledge @ Wharton 09/15/2010 Will Hopes for European Austerity Be Deflated?, Knowledge @ Wharton 06/23/2010 Goldman Sachs and Abacus 2007AC1: A Look Beyond the Numbers, Knowledge @ Wharton 04/28/2010 Lehman’s Demise and Repo 105: No Accounting for Deception, Knowledge @ Wharton 03/31/2010 Empty Pockets: What Does the Greek Debt Dilemma Mean for the Global Economy?, Knowledge @ Wharton 03/03/2010 Banking Reform Proposals: Why They Miss the Mark, Knowledge @ Wharton 02/17/2010 African Renaissance Depends on Internal Growth, Stable Governments — and Patience, Knowledge @ Wharton 01/06/2010 Could Dubai World’s Debt Default Spark a Crisis in the Middle East and Beyond?, Knowledge @ Wharton 12/09/2009 TARP Sees Sharp Turnaround, Knowledge @ Wharton 12/01/2009 ‘Too Big to Fail’: Can Regulation Control Systemic Risk?, Knowledge @ Wharton 10/14/2009 A Year after Lehman’s Collapse: What Does Wall Street Look Like?, Knowledge @ Wharton 09/16/2009 Checkup for U.S. Banks: Healthy in Appearance — but Weaknesses Remain, Knowledge @ Wharton 09/16/2009 Unfreezing Securitization: Restoring the Market’s Confidence in Itself, Knowledge @ Wharton 08/05/2009