Mission, History, and Objectives
The primary objectives of the Salomon Center are to bring NYU Stern’s research on financial institutions and financial markets to the attention of policymakers, regulators, practitioners, fellow academics, the media, and the general public; to facilitate the flow of ideas among these constituents; and to support the creation of cutting-edge research at NYU Stern.
The Salomon Center interfaces with its external constituents in a variety of ways, including regular conferences, workshops, and public lectures, often in collaboration with external sponsors and collaborators, such as Nasdaq, Standard & Poor’s, the Federal Reserve Bank of New York, Moody’s Investor Service, the International Securities Exchange, Natixis, Institutional Investor, The Clearing House, Cornerstone Research, Charles River Associates, Navigant, and the CFA Institute.
The history of the Center goes back to 1972, when the School received a generous founding grant from the partners of Salomon Brothers. The Center’s first Director was Professor Kalman Cohen (1972-75), who was succeeded by Professor Arnold Sametz (1975-90), and later by Professor Ingo Walter (1990-2003), Professor Matthew Richardson (2003-2015), and Professor Alexander Ljungqvist (2015–2018). The Center is currently directed by Professor Philipp Schnabl. The Center funds its activities through endowment income, contributions by corporate sponsors, and income from publications and conferences.
Over the years, the Center has been at in the forefront of business and regulatory developments affecting the financial services industry. Research undertaken at the Center laid the groundwork for financial deregulation in the U.S., culminating in the 1999 Gramm-Leach Bliley Act. Other work pioneered new approaches to portfolio optimization and the dynamics of new investment instruments such as exchange-traded funds. A broad range of research on derivatives and asset pricing has resulted in the Center a leading center of excellence in this area. Research on corporate governance, the role of bond rating agencies, executive compensation, professional conduct and conflicts of interest, all of which rose to prominence in the early part of the last decade, was conducted well before these issues came to the attention of the public. So did work on bankruptcy prediction, credit risk, and distressed debt markets, which have influenced the thinking of regulators and investors around the world.
In the wake of the 2007-2009 financial crisis, the Center has played a leading role in the development of the new regulatory architecture of global finance. The Center added its voice to the public policy debate through a series of publications and events, including Restoring Financial Stability: How to Repair a Failed System (Wiley 2009), Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance (Wiley 2010), and Guaranteed to Fail: Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance (Princeton Press 2011).
The Center’s activities are grouped into the following six research programs, each directed by an NYU Stern professor:
- Alternative Investments, directed by Matthew Richardson
- Credit & Debt Markets, directed by Edward I. Altman
- Financial Policy and Institutions, directed by Bruce Tuckman and Alexander Ljungqvist
- Household Finance, directed by Johannes Stroebel
- Insurance Research, directed by Ralph Koijen
- The NASDAQ Derivatives Research Project, directed by Stephen Figlewski
Two of the Center’s previous research initiatives have since been spun out as stand-alone entities: