Financial Darwinism

ISBN-13: 9780470385463 / Angielski / Twarda / 2008 / 172 str.

Leo M Tilman

Opis

In Financial Darwinism, author Leo Tilman lays the groundwork for understanding the new financial order by introducing his evolutionary thesis and then outlines an actionable decision-making framework that enables financial institutions and investors to fully leverage the power of business strategy, corporate finance, investment analysis, and risk management. Financial Darwinism is an invaluable road map to today's financial world and an essential guide to surviving and thriving during these challenging times.

Recenzje

"As the world places increasing emphasis on fair valuation, risk–based financial disclosure and risk–focused regulation, Tilman′s guide becomes more important for CEOs, directors and fiduciaries who must build risk evaluation into all fundamental decisions." ( Corporate Governance)

While Tilman′s thesis is directed to financial firms, the concept applies to all businesses. Failure to adopt a risk management strategic planning model will lead to extinction, hence the "Darwinism" in the title. Summing Up: Recommended. (Choice, April 2009)

"...Tilman couldn′t have chosen a better time...clearly written and with plenty of rational advice for financial institutions" (City A.M., December 11th 2008)

"One of the book′s merits is that he offers tables that provide taxonomies of business model transformation." (Financial World, February 2009)

"This book is highly recommended for finance professional sat all levels of an organization as well as investors desiring insights into how firms can weather the "tectonic shift" in the financial landscape. The terminology and models used should be within the grasp of anyone who has taken an undergraduate course in finance." (Journal of Corporate Finance and Accounting)

[Tilman] sees much to be learned from the collective blindness that led to the economic meltdown. says the first steps to recovery are humility and innovation (Alpha magazine)

"This book offers a deeply thoughtful and well–reasoned analysis of what has gone wrong and the outlines of an eventual road to recovery." (Financial Executive International)

Spis treści

Foreword ix

Preface xv

Acknowledgments xix

CHAPTER 1 Understanding and Navigating the Financial Revolution 1

Introduction: The Need for Transformational Thinking 1

From George Bailey to the Golden Age 5

Accounting for Profits the Old–Fashioned Way 7

The Great Moderation As an Evolutionary Catalyst 11

Economic Performance in the Dynamic New World 14

Pressures on Static Business Models 18

Dynamic Finance Perspective on Financial Crises 21

Pillars of Strategic Decision Making 25

Value Creation Through Dynamism and Business Model Transformations 26

Beyond the Facade: The Importance of Risk–Based Transparency 35

CHAPTER 2 The Old Regime and Its Demise 39

Economic Performance and Viability of Financial Institutions 39

Static Business Models 41

Dominant Forces: The Future that Has Already Happened 46

Pressures on Static Business Models 55

CHAPTER 3 The Dynamic New World 65

Risk–Based Economic Performance 65

Balance Sheet Arbitrage 68

Principal Investments 69

Systematic Risk Exposures 71

Fees and Expenses 74

Capital Structure Optimization 75

Economic Performance Attribution 75

CHAPTER 4 Business Model Transformations 79

Pillars of Strategic Decisions in a Dynamic World 79

Responsive Recalibrations of Business Models 81

Full–Scale Business Model Transformations 86

Making the Strategic Vision a Reality 93

CHAPTER 5 The Road to Financial Darwinism 99

Real–World Business Model Transformations 99

Stakeholder Communication & Equity Valuation in a Dynamic World 109

Economic Value Creation (and Destruction) by Non–Financial Corporations 112

The Infamous Carry Trade and the Old Ways of Thinking 115

A Dynamic Finance Perspective on Modern Financial Crises 118

Beyond the Facade: The Need for Risk–Based Transparency 127

Conclusion 129

Epilogue: Financial Darwinism and the Crisis of 2007 2008 133

Appendix A: The Risk–Based Economic Performance Equation 137

Appenidx B: A Case Study in Dynamic Finance 141

Notes 157

References 163

About the Author 167

Index 169

O autorze

Leo M. Tilman is President of L.M. Tilman & Co., a strategic advisory firm that serves governments, financial institutions, corporations, and institutional investors worldwide. Prior to founding his own company, he held senior positions with BlackRock and Bear Sterns. Tilman teaches finance at University, which is also his graduate alma mater. He is coauthor of Risk Management (Wiley) and editor of Asset/Liability Management of Financial Institutions (Institutional Investor). Tilman is a contributing editor of the Journal of Risk Finance and a frequent speaker at leading business schools and conferences. He serves on the advisory board of the Center on Capitalism and Society at Columbia University and on the board of directors of Atlantic Partnership. Tilman has been honored by the World Economic Forum as a Young Global Leader, joining a select group of executives, public figures, and intellectuals recognized for "their professional accomplishments, commitment to society, and potential to contribute to shaping the future of the world."

Blurb

Praise for FINANCIAL DARWINISM

"The best business management tool is common sense. While such a timeless truth remains indispensable, it takes new thinking to navigate the astonishingly complex and rapidly changing world of finance. Over the years, I have personally witnessed leading organizations′ reliance on Leo Tilman′s advice and insights to deliver consistent profits and manage risk. I hope the readers of this smart, original, and practical book will benefit in kind."
Alan C. "Ace" Greenberg, Vice Chairman Emeritus, J.P. Morgan

"Responding to earnings pressures with outdated concepts and tools or, worse yet, blind risk–taking has an unhappy ending in every case. Get your organization′s costs under control and staff it with highly competent professionals. Then use Financial Darwinism to prosper in the world of globalization and deregulation."
Jamie B. Stewart Jr., President and CEO, The Federal Farm Credit Banks Funding Corporation Past Acting President and COO, The Federal Reserve Bank of New York

"A masterful treatise on piloting complex financial institutions through the newer and tougher challenges imposed on them by the evolving marketplace. Tilman presents a unified conceptual framework that not only resonates with one′s intuition, but also offers specific structural approaches to the decisions made by financial executives. This book is a must for anyone interested in improved strategies for risk management and economic performance."
Dr. Darrell Duffie, Dean Witter Distinguished Professor of Finance, The Graduate School of Business, Stanford University

"Tilman has distilled the larger pattern from the seemingly endless reorganizations of financial institutions, some strategic and others quite foolish. Financial Darwinism articulates a framework for understanding and, for financial executives and practitioners, initiating strategic choices."
Dr. Bennett W. Golub, Vice Chairman, BlackRock, Inc.

"Financial Darwinism explains the tectonic shifts now underway in the investment world far better than any book I have seen to date. Those who are interested in really understanding how financial markets have dramatically changed in the past few years and how they are likely to change again in the next few years would do well to read and absorb this important work by Leo Tilman."
David M. Rubenstein, Cofounder and Managing Director, The Carlyle Group