Financial Economics Training for Market Professionals

Throughout my career, I've witnessed a division - call it a "knowledge gap" - between economists and those working in applied finance. A formal economics education typically provides only a limited introduction to finance and financial instruments. Meanwhile, it is not uncommon to find physicists, for example, or others with a quantitative background, pricing complex securities or derivatives but with little understanding of what moves interest rates through the business cycle.

We see this "knowledge gap" in the evolution of the current crisis. Many economists and policymakers had clearly never heard of some of the instruments involved - mortgage-backed securities (MBS), collateralised debt obligations (CDOs), credit default swaps (CDS) - and certainly had no idea of how they are priced. Risk managers, on the other hand, seemed unaware of the growing threat posed by macroeconomic imbalances.

I've always believed that it can be very powerful to bridge this gap. I've done this successfully throughout my career, applying my skills as an economist in senior research and strategy positions on the trading floor. Economists have much to learn about the interaction of policy and markets, and can be much more effective with a deeper understanding of the instruments. Market professionals can implement strategies more effectively with a better grasp of economic fundamentals.

• PhD in International Monetary Economics
• 30-year experience in the City of London
• Senior positions held in major global investment banks
• Consistently voted one of the leading global bond strategists
• Experienced university lecturer in finance
• Executive education