November 30, 2003

Smith Finance Faculty Display Global Reach

What common thread is woven among government agencies, business entities, and Smith School finance students, linking them together? The finance faculty, whose connections affect global finance policy and practice, and enhance the education and career prospects of undergraduate, graduate, and doctoral students.

Members of the department conduct leading-edge scholarship with far-reaching results. For example, the research of Lemma Senbet, the William E. Mayer Chair in Finance and chair of the finance department, brings corporate finance paradigms to public domain issues. In collaboration with World Bank economists, he has conducted a large-scale empirical study on the effect of deposit insurance and regulatory schemes on financial development and stability across countries. Last December, Senbet had a dialogue with the prime minister of Ethiopia on financial sector reform issues while the prime minister was in the U.S., at the invitation of President George W. Bush.

The Smith School faculty has developed some of the leading quantitative models employed today throughout the financial industry. Dilip Madan, professor of finance, created the Variance Gamma Model, which is used daily by Morgan Stanley to value its books of options contracts worldwide.

Madan and Haluk Unal, professor of finance and a senior fellow at the University of Pennsylvania's Wharton Financial Institutions Center, have published their joint research on credit risk in the center's working paper series and served as panelists on the center's financial engineering roundtable on the quantification and trading of credit risk. Madan also has taught seminars on credit risk in London and New York.

The faculty's influence extends beyond their own work. Smith School-trained Ph.D.s are at work building financial models for such institutions as Swiss Re Financial Products, Morgan Stanley, and The World Bank.

In recent years, the Smith School has made it a priority to recruit finance faculty whose solid industry background further strengthens the real-world content delivered to students.

Executive-in-Residence Margaret (Meg) VanDeWeghe, a former managing director at J.P. Morgan, teaches courses in equity analysis and portfolio management. She also advises the Mayer Fund, a select group of second-year Smith MBA students who manage a portion of the school's endowment. Steven Heston was hired last year from global investment broker Goldman Sachs, where he was vice president of arbitrage and quantitative equities for the U.S. market. Louis Gattis Jr. served as Freddie Mac's market risk oversight director, managing a $500-billion leveraged mortgage-and-bond portfolio, before coming to Smith in 2002 to teach MBA finance classes. This fall, Elinda Fishman Kiss joined the school, bringing experience as assistant vice president of capital markets for Citicorp Investment Bank, and as acting treasurer and CFO of Resolution Trust Corporation.

The ongoing academic-industry relationship has helped to strengthen career networks of Smith students and enhanced the value graduates deliver to the school's corporate partners.

As the finance department's Unal states, "Measuring credit risk is the hottest research topic in finance, and every company wants a credit-risk model to measure default risk." The professor served as faculty advisor to the Smith MBA Consulting team that developed a credit-risk model for Constellation Power Source (CPS), the wholesale power marketing and risk-management subsidiary of Constellation Energy Group Inc. The team's efforts garnered the 2003 Best MBA Consulting Project award and praise from CPS management. "I was overwhelmed by the quality of the team's work," states Andy Kiss, MBA '99, CPS vice president.

For more information on the Smith School's finance department, visit

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About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master’s, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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