ILB RISING TALENTS IN FINANCE AND INSURANCE During this Risk Forum 2021 side event we presented a selection of “Rising Talents” from the ILB Network (maximum eight years after their thesis), whose work have been judged particularly promising by their peers. Four doctoral students presented their thesis in 180 seconds. And, in collaboration with La Fondation d’entreprise SCOR pour la Science, we announced two talents who have already manifested their high-level research and have been awarded the title “Best young researcher in Finance and Insurance” 2020 and 2021. Program 9:00 Opening by Elyes Jouini, Academic VP ILB. 8 RISING TALENT PRESENTATIONS 9:05 #1 Capital Commitment, Elise Gourier, ESSEC Business School et CEPR. Discussant: Catherine Casamatta, Toulouse School of Economics. Link to paper 9:30 #2 Mean Field Games with Branching, Zhenjie Ren, Ceremade, Université Paris-Dauphine PSL. Discussant: Peter Tankov, ENSAE. Link to paper 9:55 #3 Evading Corporate Responsibilities: Evidence from the Shipping Industry, Guillaume Vuillemey, HEC Paris. Discussant: Patricia Crifo, Ecole Polytechnique. Link to paper 10:20 #4 Central Bank Digital Currency: When Price and Bank Stability Collide, Linda Schilling, CREST, Ecole Polytechnique and CEPR. Discussant: Mariana Rojas-Breu, Université Paris-Dauphine PSL. Link to paper 10:45 #5 The characteristic function of Gaussian Stochastic Volatility Models: an Analytic Expression, Eduardo Abi Jaber, Université Paris 1 Panthéon-Sorbonne. Discussant: Stéphane Villeneuve, Toulouse School of Economics. Link to paper 11:10 #6 Fiscal Limits and the Pricing of Eurobonds, Jean-Paul Renne, Université de Lausanne. Discussant: Marielle de Jong, Grenoble Ecole de Management. Link to paper 11:35 #7 AHEAD: Ad Hoc Electronic Auction Design, Thibaut Mastrolia, CMAP, Ecole Polytechnique. Discussant: René Aïd, Université Paris-Dauphine PSL. Link to paper 12:00 #8 Equilibrium Data Mining and Data Abundance, Jerôme Dugast, Université Paris-Dauphine PSL. Discussant: Sophie Moinas, Toulouse School of Economics. Link to paper 4 DOCTORAL STUDENTS 12:25 “My thesis in 180s” by ILB Network students. 2 BEST YOUNG RESEARCHER AWARDS 12:35 Best Young Researcher in Finance and Insurance Award 2020 & 2021 by Philippe Trainar, Fondation d’entreprise SCOR pour la Science and Elyès Jouini, Institut Louis Bachelier. 12:50 Concluding remarks by Jean-Michel Beacco, CEO ILB. Presentation by 4 doctoral students "My thesis in 180 sec". Annual Prize for Best Young Researcher in Finance and Insurance (IEF) During the International Forum on Financial Risk and the “Rising Talents” side event organised by the ILB/Europlace Institute of Finance on 26 March 2021, the SCOR Foundation for Science awarded the 2020 and 2021 Best Young Researcher in Finance and Insurance prizes to Matthieu Bouvard, professor at the Toulouse School of Management (University of Toulouse), specialising in Finance, and member of the Toulouse School of Economics, and Kim Peijnenburg, professor of Finance at EDHEC, researcher affiliated to the Centre for Economic Policy Research (CEPR) and member of the Network for Studies on Pensions, Aging, and Retirement (Netspar). Matthieu Bouvard‘s research focuses on financial intermediation and the impact of technological innovation in finance (Fintech). His article published in 2019 in the very prestigious Review of Financial Studies and co-authored with Bruno Biais, Christophe Bisière and Catherine Casamatta, “The Blockchain Folk Theorem”, has attracted particular attention. The authors reveal two major sources of inefficiency in blockchain. On the one hand, it generates instability that leads to persistent forks. On the other hand, it encourages miners to over-invest socially inefficiently in computing power. Kim Peijnenburg‘s research focuses on household financial decisions. Her recent paper, with Gian-Paolo Parise, published in the prestigious Review of Financial Studies, “Noncognitive Abilities and Financial Distress”, was of particular interest to the jury. In it, the authors develop measures of emotional stability and consciousness of households, which allow them to show that this stability is a determining factor in financial distress, ahead of income. André Levy-Lang, President of the SCOR Foundation for Science, comments: “The SCOR Foundation for Science is pleased to distinguish researchers who highlight areas of research that are less well known but whose strategic character for the development of contemporary societies is highlighted. Philippe Trainar, Director of the SCOR Foundation for Science, states: “With this award, which is being presented for the fifth consecutive year, SCOR and its Foundation for Science are proud to encourage innovative and original young researchers who are working on key areas at the frontiers of our knowledge of new technologies and agents’ financial decisions. Best Young Researcher in Finance and Insurance Award 2021: Kim Peijnenburg, EDHEC Business School CV Award 2020: Matthieu Bouvard, University of Toulouse CV Best Young Researcher in Finance and Insurance Award 2021 I Kim Peijnenburg Watch the video Best Young Researcher in Finance and Insurance Award 2020 I Matthieu Bouvard Watch the video × × Best Young Researcher 2021: "It is a great honour to have won this award" On the sidelines of the virtual award ceremony, presided over by Elyès Jouini, Scientific Director of the IEF and Philippe Trainar, Risk Director at SCOR, Kim Peijnenburg answered questions from the Institut Louis Bachelier (ILB). ILB: What does the IEF / SCOR Foundation for Science award for the Best Young Researcher in Finance and Insurance mean to you? Kim Peijnenburg: It is a great honour to have won this prize. It also gives visibility and relevance to my research work, beyond the academic sphere, which is the goal of any researcher. Can you give us more details and explain briefly the main research themes you are working on? K. P.: My main research theme is household financial decision-making and its impact on general well-being. I am particularly interested in how behavioural processes and traits shape household choices. What are the next topics you will work on? K. P.: I will continue to work on the area of personal finance, as there are still many research questions to be answered in order to learn more about household decision-making processes. To do this, I will use Danish administrative databases and combine them with laboratory experiments involving a thousand people. Finally, why study the case of Denmark? K. P.: Each country has different databases, but Denmark has extremely rich data that are more easily exploited for my research. Also, the data is more suitable for laboratory experiments than data from other countries. Best Young Researcher in Finance and Insurance 2020: "Bitcoin's volatility is not so particular and specific" On the sidelines of the virtual award ceremony, presided over by Elyès Jouini, Scientific Director of the IEF and Philippe Trainar, Risk Director at SCOR, Matthieu Bouvard answered ILB’s questions. ILB: What does the IEF/SCOR Foundation for Science Award for Best Young Researcher in Finance and Insurance mean to you? Matthieu Bouvard: It is an honour and a satisfaction to receive this prestigious award. Looking at the history of this award, I find it very flattering to find my name in the company of recognised researchers such as my colleagues Thierry Mariotti and Sophie Moinas or Johan Hombert. I would also like to underline the efforts made by the ILB and the Scor Foundation for Science to bring scientific research and financial industry professionals closer together. Can you give us a detailed description and brief explanation of the main research themes you are working on? M. B.: I am particularly interested in fintechs, which evolve at the crossroads between information technology and financial services. Generally speaking, the angle I have chosen to study concerns the notion of financial risk, which is constantly fluctuating and in parallel with financial innovations. With new entrants to the market, new risks appear. It is therefore very important to identify and understand them in order to manage them properly. To further illustrate my research, let’s take two recent examples of work. The first concerns the blockchain, which is the technological infrastructure underlying cryptocurrencies, notably bitcoin. This protocol allows transaction data to be recorded, but if there is a loss or lack of consensus between the parties, the stability of the infrastructure can be disrupted and this raises many questions, particularly about security. The second example concerns the increasingly fast functioning of markets and its impact on the real-time risk management of large financial institutions. You are interested in blockchain in general and bitcoin in particular, how do you analyse the current boom in cryptocurrencies? M. B.: Crypto-currencies, especially bitcoin, are similar to traditional currencies, which are not asset classes like stocks or bonds whose valuation can be based on a fundamental analysis, i.e. an estimate of the future flows that these assets will generate (dividends, coupons). It should be remembered that it is very difficult to predict the movements of currencies issued by central banks, as these mechanisms are not well understood in finance. This difficulty in explaining price movements also applies to bitcoin, which is much more volatile. Nevertheless, the possibility and ease of trading in Bitcoin can be interpreted as part of the fundamental value of Bitcoin. For example, in the recent period, major companies such as Tesla, Visa, Mastercard, Paypal and even BlackRock, have announced the possibility of trading or investing in Bitcoin, which are tangible elements in its favour that can explain its appreciation. It remains that a significant part of bitcoin’s volatility does not seem to be explained by the movement of these fundamentals. To conclude, what are the next topics you will work on? M. B.: I will continue to focus on new payment systems, which is a very evolving area. Historically, this was the domain of the banks, but some segments have migrated to new players. China is certainly the most advanced example with the development of mobile payment solutions by Alipay and WeChat that compete with the banking system. This movement can also be observed in the United States with major players such as Amazon and Facebook. This trend raises many research questions: Why is this competition emerging? What are the synergies between social networks, their users and payment methods? How can we understand and apprehend these new risks? How can the new players be regulated? For more information on the Best Young Researcher Award in Finance and Insurance click here.