Book Description
A grand and revelatory portrait of Wall Street’s most storied investment bank
Wall Street investment banks move trillions of dollars a year, make billions in fees, pay their executives in the tens of millions of dollars. But even among the most powerful firms, Lazard Frères & Co. stood apart. Discretion, secrecy, and subtle strategy were its weapons of choice. For more than a century, the mystique and reputation of the "Great Men" who worked there allowed the firm to garner unimaginable profits, social cachet, and outsized influence in the halls of power. But in the mid-1980s, their titanic egos started getting in the way, and the Great Men of Lazard jeopardized all they had built.
William D. Cohan, himself a former high-level Wall Street banker, takes the reader into the mysterious and secretive world of Lazard and presents a compelling portrait of Wall Street through the tumultuous history of this exalted and fascinating company. Cohan deconstructs the explosive feuds between Felix Rohatyn and Steve Rattner, superstar investment bankers and pillars of New York society, and between the man who controlled Lazard, the inscrutable French billionaire Michel David-Weill, and his chosen successor, Bruce Wasserstein.
Cohan follows Felix, the consummate adviser, as he reshapes corporate America in the 1970s and 1980s, saves New York City from bankruptcy, and positions himself in New York society and in Washington. Felix’s dreams are dashed after the arrival of Steve, a formidable and ambitious former newspaper reporter. By the mid-1990s, as Lazard neared its 150th anniversary, Steve and Felix were feuding openly.
The internal strife caused by their arguments could not be solved by the imperious Michel, whose manipulative tendencies served only to exacerbate the trouble within the firm. Increasingly desperate, Michel took the unprecedented step of relinquishing operational control of Lazard to one of the few Great Men still around, Bruce Wasserstein, then fresh from selling his own M&A boutique, for $1.4 billion. Bruce’s take: more than $600 million. But it turned out Great Man Bruce had snookered Great Man Michel when the Frenchman was at his most vulnerable.
The LastTycoons is a tale of vaulting ambitions, whispered advice, worldly mistresses, fabulous art collections, and enormous wealth—a story of high drama in the world of high finance.
Customer Reviews:
Oh, the memories.......2007-07-27
This book brought back so many memories of the time (late eighties/early nineties) and place. Looking back while reading this book, I realize how much I learned about people and industry while working in investment
banking (albeit a bit remotely) in NYC in those years. The level of detail
that Bill Cohan brings to the topic of Lazard is noteworthy. It's a fun
read for insiders and non-insiders alike. I hope things are better for
women now - my daughter wants to be an investment banker when she grows up!
A great book for "warped" people (like myself)!.......2007-06-11
660+ pages about the 150+ year history of Lazard Feres might put most people to sleep. Not me! As someone who actually likes this stuff, I found this book fascinating. The history of big money and finance is actually one of big personalties, and this book gives an inside look at several of the major players. Although tedious at times to read, I made it through the entire book in a couple of days. The most fascinating part of the entire story is simply that money at the levels discussed in this book doesn't seem real--most people could never fathom how corporate finance is conducted. I recommend this book to anyone interested in the subject of investment banking, especially those considering a career in that arena.
Long but worth it.......2007-05-30
extremely long, but it gives you a great description of how an organization rises and falls with the times and the great men who are at the wheel.
Destined to be a Classic.......2007-05-24
Cohan has brought to life a vivid and spellbinding tale of the legendary giants in the investment banking field (Meyer, Rohatyn, David-Weill, Rattner, and Wasserstein) at Lazard, offering a compelling and revealing portrait of the relentless personalities that invented, dominated and defined the last few decades of M&A banking. At the same time, The Last Tycoons is, at its core, a saga of ambition, egotism, greed, vanity and pride of Shakespearean proportions played out on the grand stage of corporate takeovers and national politics.
What emerges is not a noble picture of what these ostensibly "Great Men" purported themselves to be. Instead, it is apparent that at Lazard, the black arts of power and greed were the currency used to exhort and extort men of high ambition and intellect to achieve stature and enormous fees. The long shadow of Andre Meyer (unquestionably a Sith Lord) looms over the Lazard partnership and his protégés and successors, Felix Rohatyn and Michel David-Weill. Meyer was a brilliant financier with no peer with the exception of Bruce Wasserstein and it's fitting and deserving that the story of Lazard begins and ends with these two men. In between, Michel and Felix weave a complex and fascinating legacy of fear and loathing in the intervening decades.
For bankers and professionals in the field, Cohan's detail and emotional and psychological nuances will be tantalizing and relevant. For those aspiring to enter the field, it's a cautionary tale - it's very hard to play on the big stage on Wall St without darkening your soul. This story is destined to be a Classic amongst Barbarians and Den of Thieves
barbarians at the gates of central park .......2007-05-19
maybe the first casualty of wealth is self-knowledge. that is the takeaway from William Cohan's fine history of the fabled lazard freres banking house. in these pages we watch titans of finance gloat and preen while their castle crumbles from corruption and mismanagement.
Its a terrific story peopled with fascinating characters. who wouldn't, after reading this book, want to dine with the formidable felix rohatyn. He fled the Nazis as a boy, rescued New York from financial ruin and ditched Lazard at just the right moment to serve the nation as Bill Clinton's Ambassador to France. His intellect and achievement dominate the book, just as Felix dominated wall street for a generation. His departure from the firm caps the end of "the great man" era in investment banking. In Rohatyn's day only a select handful of wise men could be trusted to guide transactions. Nowadays all you need is armani and a spread sheet.
Even as he maps the tectonic movement in investment banking, Cohan keeps it light with plenty of well-researched dish on criminal investigations, love affairs, fabulous art collections, New Yorkana and the occasional drop to earth by some of Lazard's wax-winged partners. I closed the book -- a whopping 750 pp's -- edified and thoroughly entertained.
Book Description
The winner of the National Book Award and now considered a classic, The House of Morgan is the most ambitious history ever written about an American banking dynasty. Acclaimed by The Wall Street Journal as "brilliantly researched and written," the book tells the rich, panoramic story of four generations of Morgans and the powerful, secretive firms they spawned. It is the definitive account of the rise of the modern financial world. A gripping history of banking and the booms and busts that shaped the world on both sides of the Atlantic, The House of Morgan traces the trajectory of the J. P. Morgan empire from its obscure beginnings in Victorian London to the crash of 1987. Ron Chernow paints a fascinating portrait of the private saga of the Morgans and the rarefied world of the American and British elite in which they moved. Based on extensive interviews and access to the family and business archives, The House of Morgan is an investigative masterpiece, a compelling account of a remarkable institution and the men who ran it, and an essential book for understanding the money and power behind the major historical events of the last 150 years.
Customer Reviews:
Comprehensive, interesting and relevant book.......2007-03-03
This is a great story told well. Chernow is an amazing researcher and a very good writer. I agree with some of the reviewers that the earlier parts of the book are better, but his description of the transformation of the capital markets in the late 20th century and the House of Morgan's role in this transformation is interesting and relevant. This book increased my understanding of the banking and investment banking worlds. My only quarrel is that, at times, I thought Chernow editorialized too much detracting from the story. Like many financial journalists, I got the sense that he is not a big fan of capitalism. Perhaps that's unfair, but if he simply told the story without some of his asides, the book would have been even better.
A book about the history of a family.......2006-12-14
This is an interesting book about the history of the Morgan family. It tends to drag on and is not as good as Chernow's other books about finance (notably Hamilton). I was expecting quite a bit more on JP Morgan and the book did not deliver in that way. Despite those two flaws the book is filled with such good information and is so well organized that it still deserves five stars I would just know you are not buying a book solely or even focusing on JP Morgan.
America's Gilded Age.......2006-11-10
Ron Chernow is good at writing in great detail while making his books interesting. "House of Morgan" is well documented as are all of Chernow's books. This book is the interesting story of big banking in the United States and abroad during the period of 1850-1900. Chernow goes beyond the earlier years of the J. P. Morgan empire to the present; giving an introduction to Morgan/Chase as we know it today. The early founder, Pierpont, was ruthless, secretive and rich. The book is a long one, and took awhile to read, but it was worth the time.
The history of JP Morgan par excellence!.......2006-10-26
A much more engaging and beautiful account on the life of the Morgan family and their banking legacy has been outdone by this work from Ron Chernow.
The book covers all aspects of the Morgan family and even discovers long forgotten family secrets. It dwells into the minds of these great capitalists and takes the reader deep into historic moments in American financial history. The overall grandeur and majesty of some of the most powerful men to have ever walked the earth, men who saved the U.S. from financial ruin, is evident in every page.
Read this one and you will love it!
In Depth, to the Nth degree.......2006-04-22
I read Chernow's awesome book on Rockefeller and expected the same from this treatment of America's first uber-bank. For some reason the narrative just seemed half as interesting as the Rockefeller book. This work primarily seemed to be lots of facts and figures and a historical timeline-- the interesting anecdotes and sidebars available in Rockefeller seemed to be somewhat lacking here-- either that or I've become jaded in what entertains me.
Overall it's certainly the definitive work on the subject to be sure, but I was hoping on a little more entertainment as the thing is a telephone book. And anyone can read a telephone book for a hundred pages-- 500 pages takes dedication.
Book Description
Today's most complete, up-to-date reference for controlling credit risk exposure of all types, in every environment
Measuring and Managing Credit Risk takes you far beyond the Basel guidelines to detail a powerful, proven program for understanding and controlling your firm’s credit risk. Providing hands-on answers on practical topics from capital management to correlations, and supporting its theories with up-to-the-minute data and insights, this authoritative book examines every key aspect of credit risk, including:
- Determinants of credit risk and pricing/spread implications
- Quantitative models for moving beyond Altman’s Z score to separate “good” borrowers from “bad”
- Key determinants of loss given default, and potential links between recovery rates and probabilities of default
- Measures of dependency including linear correlation, and the impact of correlation on portfolio losses
- A detailed review of five of today’s most popular portfolio models—CreditMetrics, CreditPortfolioView, Portfolio Risk Tracker, CreditRisk+, and Portfolio Manager
- How credit risk is reflected in the prices and yields of individual securities
- How derivatives and securitization instruments can be used to transfer and repackage credit risk
Today’s credit risk measurement and management tools and techniques provide organizations with dramatically improved strength and flexibility, not only in mitigating risk but also in improving overall financial performance. Measuring and Managing Credit Risk introduces and explores each of these tools, along with the rapidly evolving global credit environment, to provide bankers and other financial decision-makers with the know-how to avoid excessive credit risk where possible—and mitigate it when necessary.
Customer Reviews:
Must have for risk management.......2007-06-29
Yes, this is a must have. Written by S&P auther, it is the definitive guide, no question should be asked. cause they are credit king.
Many details on how to measure risk, quantitative methods in detail. Ideas and industry practice all in great detail. I could imagine some quants will use it as a cook book for their project.
overall, well written for easy read. both good for a glance at credit risk and for in depth learning of industry standard.
Most Appropriate for Basel II.......2005-09-08
If you are Banker/Banking Consultant then this book is the closest you will get to understanding Credit Risk from a Basel II perspective. Its clear & lucid style helped me understand the gamut of techniques used in Credit Risk Measurement. Unfortunately the Book does not get into the details of bulinding models so if your looking for a model building cookbook, look elsewhere.
a complete, robust and comprehensive valuable resource!.......2004-06-16
In Measuring and Managing Credit Risk, the authors provided a robust, complete and comprehensive treatment of several aspects of modern credit risk measurement and management. Written by two high talented practitioners, this book will become certainly a reference both for academics and practitioners thanks to its careful treatment of several not so known empirical issues which practitioners have to face everyday. At the same time, do not consider the book as a new recipes book for managing credit risk. Both authors already proved their deep knowledges of financial theory and establish once again, through this book, how advanced knowledges of theory combined with significant practical experience make leading researches. As a PhD candidate in Finance, actually writing on credit risk, I definitively adopted this book and higly recommend it for anyone dealing with credit risk issues either through a practical experience or through a theoritical work.
Book Description
Dr. Donald DePamphilis explains the real-world of mergers, acquisitions, and restructuring based on his academic knowledge and personal experiences with over 30 such deals himself. The 77 case studies span every industry and countries and regions worldwide show how deals are done rather than just the theory behind them, including cross-border transactions. The interactive CD is unique in enabling the user to download and customize content. It includes an Excel-based LBO model and an M&A Structuring and Valuation Model in which readers can insert their own data and modify the model to structure and value their own deals. New additions to the third edition: 17 new cases, with all 77 cases updated, Glossary, real options applications, projecting growth rates. Student Study Guide on CD contains practice problems/solutions, powerpoint slides outlining main points of each chapter, and selected case study solutions. An extensive on-line instructors manual contains powerpoint slides for lectures following each chapter, detailed syllabi for using the book for both undergraduate and graduate-level courses, and an exhaustive test bank with over 750 questions and answers (including true/false, multiple choice, essay questions, and computational problems).
*Practical, real-world approach with 77 case studies from around the globe
*CD has customized content and the latest models and forecasting tools
*Student Study Guide on CD has practice problems/solutions, powerpoint slides, and selected case study solutions
Customer Reviews:
Clearly a Home Run!!!.......2006-03-18
This is one of those books that I wish I had written. As an experienced deal maker, I know what works and what doesn't. This book explains from a highly practical perspective the "art and science" of the deal. The author clearly has done his share of transactions in terms of his ability to capture the dynamic nature of the deal structuring and acquisition process. The author, as the chess master, goes through the development of alternative deal structures and strategies designed to consummate the deal. The process of offers and counter-offers is illustrated in a delightful and comprehensive case study at the end of the book.
The book is written with a fluid style that brings what for most are very difficult concepts to life in a readily understandable yet rigorous way. The author's nummerous insights are documented through references to recent academic and practitioner studies and illustrated by using recent case studies. I find the author's frequent use of brief studies of transactions to illustrate his current point very enlightening.
This book is far more than a reference or textbook; it is the reader's ticket to learning how to do deals and implement corporate restructuring activities. The book abounds with numerical and non-numerical examples to illustrate how to do things. The CD included with the text is easily worth the price of the book in that it provides numerous complex deal structuring and valuation M&A and LBO models. The CD also contains a wealth of other information including question lists for conducting due diligence and solutions to case study questions and problems contained in the text.
Yes, I wish I had written this book. But, then, those things are best left to those who can.
A Refreshing New Approach to Learning.......2006-01-01
Many business books take a pedantic, ponderous approach to what could easily be characterized as a challenging subject. However, I found the lively writing in this book to be very helpful to keeping my attention and to making difficult material more understandable. While the book is exhaustive, I found each chapter to be largely self contained. This text is clearly the most useful I have read on this subject. The CD included with the book contains models, presentations, chapter outlines, problem sets with answers, etc., all of which make this book the best available on the market.
Great Book and Great CD.......2005-12-22
This book is a one-stop shop for those interested in M&A. It covers all the relevant topics from how to develop a rigorous business plan appropriate to undertake an acquisition, to identifying and approaching target firms, to succesful negotiation, to planning and performing due dilgence, to planning and implementing successful integration, to financing the transaction. The book also addresses how to design effective takeover tactics and defenses. I was most impressed with the extent of the explanations about how to design and implement acquisition plans from a real world perspective. The author also addresses how to design effective takeover tactics and defenses. I also found the material on the M&A implications for governance very valuable.
The book is also very well documented. The extensive list of publications is very helpful for locating more articles and books on this exciting subject. I found the glossary of M&A terms among the most useful I've seen. It could be published as an M&A dictionary. The numerous case studies sprinkled throughtout the book are very helpful in demystifying the subject.
The CD included with the books contains a wealth of material often available on the internet for hundreds of dollars. The detailed M&A models and leveraged buyout models and due diligence question lists are available for customizing to meet your specific circumstances. I found the buyer due diligence question list in electronic form to be very valuable when it came time to making changes for my own needs The chapter outlines, study guides, and presentations also included on the CD are very helpful in internalizing the material. The CD also contains ansewrs to many case study questions and chapter questions.
All things considered, this book is a must have for anyone serious about learning the subject.
Highly Student Friendly.......2005-11-25
I am currently using this book in an M&A class and have found it to be an excellent business book. The book is exceptionally well organized, intuitive, and well-written. The book's use of bold type, self-explanatory headings facilitates the overall organization of the material, finding subject matter, and understanding key points the author is trying to make. The book is rich in examples, something that is often lacking in many books. The case studies for the most part of current, instructive, and insightful. The book is full of helpful insights and practical advice.
The CD -rom included with the book contains a lot of very useful stuff including powerpoint slides for each chapter, study guides for each chapter including chapter outlines and sample test questions and anwers, as well as anwers to many of the case study questions and problems in the book. The merger, acquisition, leveraged buyout and real option software illustrates how the pros analyze and value businesses. There are no secrets as you are able to access the underlying excel instructions to see how the models tick and to change them to suit your needs.
Overall, I would give this book an A+ for insightfulness, openess, practicality, readability,and organization.
Superb!!!.......2005-11-16
As you can see, I am very impressed with this book. It is by far the best book I have read on the subject in terms of thoughtfulness, organization, documentation, and practicality. It is full of well explained examples that make would could be a daunting subject understandable. The book comes with a CD that is full of M&A and LBO valuation software and excel spreadsheets, as well as a lot of other good stuff including powerpoint presentations highlighting lecture notes, student study guides, and answers to practice problems. All things considered, I would give this book a resounding thumbs up for those wanting to use in in their personal libraries, professions, or in the class room.
Book Description
Risk management is no longer confined solely to risk management specialists. Stakeholders ranging from employees to investors must understand how to quantify the tradeoffs of risk against the potential return. The failure to understand the essential nature of risk can have devastating consequences.
Globally renowned risk and corporate governance experts Michel Crouhy, Dan Galai, and Robert Mark have updated and streamlined their bestselling professional reference Risk Management to introduce you to the world of risk management without requiring you to know the intricate formulas and mathematical details.
The Essentials of Risk Management is the first book to make even the most sophisticated risk management approaches simultaneously accessible to both risk and non risk professionals. It will help you to:
- Increase the transparency of your risk management program to satisfy shareholders, employees, regulators, and other important constituencies
- Keep on top of the continuing evolution of best-practice risk policies and methodologies and associated risk infrastructures
- Implement and efficiently communicate an organization-wide Enterprise Risk Management (ERM) approach that encompasses market, credit, liquidity, operational, legal and regulatory, business, strategic and reputation risks
- Navigate thorny areas including risk policies, risk methodologies, economic capital, regulatory capital, performance measurement, asset-liability management, and more
- Efficiently allocate limited corporate resources to comply with the new generation of risk regulation and corporate governance regulation
As a non-risk professional or board member, you are being called on more than ever before to make sophisticated assessments of your organization's risk exposures as well as play a critical role in its formal risk management process. The Essentials of Risk Management tells you what you need to know to succeed in this challenging new environment.
Customer Reviews:
Good Introduction.......2007-08-01
I would highly recommend this book to the begginer/budding Risk Manager
For the experienced risk professional, this is a bit too fundamental.
An excellent introduction.......2006-07-11
This book provides an introduction to the field of risk management for readers who do not yet want to get deeply involved in the mathematical formalism that is typically used. The authors wrote the book so that it is "accessible to everyone", and they have done a fine job. Those readers who need a more quantitative treatment will have to consult another book or the vast research literature on the subject. Risk management, as they see it, is an attempt to estimate both the `expected' losses and the `unexpected' losses, and being able to differentiate between these two concepts goes to the core of the subject. Thus the book emphasizes the "intuition" behind risk management, and not the formalism. However, one must not conclude from this that "intuition" and "formalism" are distinct, and the belief that they are has resulted in a lot of confusion (and financial losses) in recent years. The authors clearly do not believe that they are, but have merely emphasized "intuition" from a pedagogical point of view.
The authors classify risk into eight categories, namely market, credit, liquidity, operational, legal and regulatory, business, strategic, and reputation risk. Financial risk, as they see it, is composed of two of these, namely market and credit risk. Their discussion of corporate risk management is very interesting, in that it begins with the observation first made almost forty years ago that the value of a firm is not altered solely by financial transactions. This is due to their assumption of the perfect market hypothesis, which effectively suppresses the ability of the firm to gain significant advantages over an individual investor. Therefore with this assumption a firm should not concern itself with risks outside of the ones that all other firms face. This is an interesting conclusion, particularly in the context of using hedging via derivatives, as it implies that it cannot compete with ordinary self-insurance, due to the presence of transaction costs. The authors discuss in fair detail why the perfect market assumption is faulty, and therefore why managing risk with hedging is a viable strategy.
The regulatory environment, particularly in the banking industry, has enormous ramifications for risk management, as the authors discuss in the book. This is due in part to the Basel Accords of 1988 and 1996, and Basel II which is due to be in place at the end of 2007. The Basel accords are essentially a standardization for capital reserves, defining a `assets-to-capital' multiple and a `risk-based capital' ratio. The authors review the 1988 Accord and discuss the elementary relationships involved, including the `Cooke ratio' and how to obtain the credit equivalent for the off-balance-sheet exposures. They also discuss the reasons for the 1996 amendment, which essentially were the result of the new trading activities that banks were indulging themselves in. It would have been interesting if the authors had included a (historical) discussion on the efficacy of the Basel Accords in suppressing banking failures. They do mention the fiasco with Barings Bank, claiming that its demise would have been adverted if it were prohibited from racking up huge exchange-traded futures positions. This is certainly true, but any regulation needs to be validated by historical data, to the extent that this is possible, and this requires of course tracking of the financial institutions that are under the umbrella of the regulation. In this regard though, the authors do view bank regulation as a `research lab' for risk management, implying that they are aware of the need for validation of any regulations that are actually put in place. It will be fascinating therefore to see the impact of the new Basel II accords when they become active, and indeed observe, if possible, any `regulatory arbitrage' that occurs. This also brings up the question of how to assess the quality of the risk management strategies of a particular financial institution. The authors spend a little time discussing this, with one of them referring to a method analogous to credit scoring.
No book on risk management could be complete without discussion of academic research on the topic, for the reason that much of this research has found practical application and has greatly influenced portfolio management and risk valuation. The authors review four theoretical models, namely modern portfolio theory, the capital asset pricing model, the Black-Scholes option-pricing model, and the Modigliani-Miller theory of corporate finance. Even though the discussions are very short, one has to admire the authors' ability to avoid complicated mathematics in discussing all of these theories without sacrificing clarity. The more mathematically-mature reader may perhaps be annoyed with the omission of mathematical formalism, but a natural question that might arise for such a reader is whether or not risk can indeed be put in a general axiomatic framework that will encompass all of its different manifestations, such as credit risk, operational risk, etc. Such a framework would allow a complete mathematical characterization of risk, and would allow various general and quantitative statements to be made about it.
Due to the extent of mortgage portfolios in the United States at the present time, and due to the sensitive dependence of their values on interest rates, the authors spend a fair amount of time discussing interest-rate risk and how to hedge it with derivatives. Thus they speak of the `sensitivity' of financial instruments to certain risk factors, and study the case of fixed-income products via the `DV01' risk measure, which is the change in value of a security after a change in interest rate of 1 basis point. This measure gives a `first-order' approximation to the change in yield, but the authors show how to obtain a `second-order' approximation using the `convexity' adjustment.
For complex portfolios, the most popular method for risk management has been the value-at-risk or VAR, and so it is not surprising that the authors devote an entire chapter to it in the book. The authors view it as a more sophisticated method because of its ability to deal with volatilities and correlations. However, they point out that its efficacy is restricted to relatively short time scales and under `normal' market conditions. The fiasco at LTCM (Long Term Capital Management) is discussed as an example of the failure of VAR to measure risk over long time scales and under abnormal market conditions. They do not however give any detailed evidence for this claim, but a perusal of the research literature (surprisingly rather slim) reveals that LTCM made "major" errors in terms of their risk management, if viewed from the standpoint of VAR. This still leaves open the question as to whether it made "major" errors from the standpoint of some other method for measuring and evaluating risk that is possibly radically different from VAR.
A Non-Mathematical Approach.......2006-04-19
The essense of investing is that increased risk should be compensated for by increased return. The problem lies in measuring and thus managing risk. Measuring risk is in the same category as predicting the future. The future is uncertain, the best guesses fail as bad weather, oil embargoes, or any of a whole list of other incidents change the situation.
Risk management isn't simply a matter of avoiding risk. It is instead a matter of identifying it, measuring it, appreciating its consequences and then taking actions accordingly. Insurance is perhaps the best example.
If a hundred sailing ships go out and 90 return, spreading the risk among all hundred ships compensates for the loss of the ten. And Lloyds is born.
During recent years several techniques have been developed to measure risk. This book discusses them in a non-mathematical way that can be used by both risk and non-risk professionals. In essence it brings sophisticated techniques to be accessible to a wide audience.
Book Description
Although the pricing and hedging of derivatives contracts has been the subject of a large number of books, hardly any books exist on the actual design of derivatives contracts. Structured Equity Derivatives fills this gap in a remarkable way. The book introduces an approach to the structuring and practical application of derivatives that allows the reader to create his own derivatives solutions to an endless variety of problems. The approach is extremely natural - the only limit is the reader's own creativity.
Since it clearly explains the reasons why derivatives exist and why there is such a large variety, this is the book that should be read before picking up any other book on the pricing and hedging of derivatives. As the book concentrates on product design instead of pricing, there are no complex pricing formulas or numerical procedures. The emphasis is on intuition and common sense rather than complex formal results, which makes the book accessible to people from many different backgrounds.
Customer Reviews:
great book!.......2005-09-10
This is the best book on structured equity products so far, it is fun to read but never trivial.
Great introduction & overview.......2004-07-27
This is still a great introduction to the subject. Being familiar with the majority of current financial 'engineering' texts, I can honestly say this is still a very good book. It does what it claims to do - and sticks to the intended audience.
A nice book for starters..........2004-01-12
This is definitely a very useful book for students taking financial engineering courses or complete newcomers in the aera of structuring. The book's written in a very clear and approachable manner and the author doesn't bother you with obscur mathematics. However, being myself a structurer of derivative products, I must unfortunately say that this book didn't really improve my knowledge in the field of structuring. But since I believe that Dr. Kat's main objective was to primarily target newcomers in the area of structured products, and not any professionals working in the business, I still think that the book is a respectable achievement.
Finally!!!! A definitive guide for common sense people.......2002-05-23
This book offers readers, who have little knowlegde about structured products, the insides of it. It is easy to read and easy to understand. I bet the reviewer from New York and Seattle are in this business themselves, as to give this book such low ratings. These people are probably affraid that their clients will buy this book and find out later that they got ripped of by their ruthless bankers. If these people are in the business, they should not have bought the book it in the first place.... Go ask your colleagues!!!
It is true that the math is non-existent, but again there are loads of books written in english with loads of formulas in it that even most english speakers don't have a clue about, and most importanly, how to apply it. This is definitely a book on the side of the consumers of these products. Buy it, you won't waste your money!!!!
Good job Dr Kat!.......2002-05-15
Very good book on structuring of derivaties. Yes, this book is mainly on structuring not pricing and some reviewers seem to forget about that blaiming it on the lack of mind-boggling maths! Good one for someone who is new in the area or read some introductory books as Hull; everything is really decomoposed into easily understandable pieces so that you can understad every possible structure. Strong recommendation for those who want to _really_ understand structuring of derivatives.
Book Description
Managing Bank Capital explains proven techniques available in the management of bank capital that will help maximize shareholder value. This second edition has been fully updated to incorporate significant developments, such as the modeling of credit risk, and includes new sections with more technical information and advanced analysis.
Customer Reviews:
Excellent overview and detail on economic capital for banks.......2006-09-06
I bought this book hoping it would quickly bring me up to speed on key concepts in Economic Capital in the financial institutions industry. This book was simple enough for a relative novice to follow, and went into enough detail that I think most people would get something out of it. I also thought the book was well organized-- each section had a summary chapter that explained what the subsequent chapters in that section would cover so you could quickly skim or deep dive on various topics. The book was a bit dated in the sections on Basel, since it was written before Basel II was completed. Overall, an excellent introduction to Economic Capital and I was happy with my purchase.
Helpful Concepts, Lacking Implementatin Steps.......2002-07-30
With all the attention paid to bank capital management, this book is helpful in describing the concepts. However, it is not quantitative enough. The step-by-step of capital allocation for a given asset class of varying risk levels is lacking. For example, how should the bank treat the sub-prime portion of its credit card or auto loans in the capital allocation? I wish it were more specific. Could Providian or Capital One have directed the capital away from high risk loans, had they followed the advice of the book?
A Must-Read Book for Shareholder Value Management.......1999-06-05
Chris Matten provides a comprehensive guide to applications of RAROC and shareholder value for managing bank capital and compensating bank executives and traders. The author provides particularly good sections on how EVA, shareholder value, and other earnings based measures can be manipulated and abused. This is not the sort of book which the corporate finance shareholder value crowd would likely read, but is one which they need to read.
Excellent only book on the economic allocation of capital........1998-04-26
Mr. Matten's insightful work highlights how rigid appliction of the Basle Accords can lead to capital misallocation. He then provides insightful suggestions, with good examples, on how to better allocate bank capital by discriminating between borrowers on the basis of risk, all the while remaining within the basle guidelines. Mr. Matten points to the need for sophisticated mathematical-statistical analysis but does not dwell on the technicalities, making the book accessible to non-rocket scientists. All in all, a highly recommended book.
Great book, but watch out for typos.......1997-12-16
For a comprehensive approach that brings the reader from Cooke through RAROC, this book is very good and has no competition . What basic explanations of statistics theory you need in order to follow the main 'story' is included discreetly, so advanced readers shouldn't be bothered by them. This being said, beware the errors -- they exist throughout: for the price that Wiley Press is able to get in light of the lack of competition from another good RAROC capital allocation book ($69 last year, $95 now), it hopefully has caught and corrected them. Caveat emptor.
Average customer rating:
- Comprehensive and excellent
- Important stuff but hard slogging
- Good book on risk management, February 4, 2002
- Don't miss it
- The best risk management book
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Risk Management
Michel Crouhy ,
Robert Mark , and
Dan Galai
Manufacturer: McGraw-Hill
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ASIN: 0071357319 |
Book Description
Last year's headline-grabbing stories of the notorious bailout of Long-Term Capital Management and the 1.4 billion credit loss for BankAmerica opened the eyes of the investment world. These turbulent times have meant increased awareness of risk management and have lead to late breaking developments in new research, techniques, and theories in the field. Given the high stakes in today's business world with financial dealings in the billions (e.g., derivatives), it's easy to see why risk management has become the key buzzword on Wall Street. While Jorion focuses strictly on market risk, today's financial professionals are also evaluating credit risk and operational risk. Managing Risk provides a comprehensive description and analysis of modern risk management, including the regulatory aspects, organizational issues, potential problem areas, and tools to control and manage the many different kinds of risks: market risk, credit risk, and operational risk. It also discusses: structuring and managing the risk management function in a firm; practical measurement issues in the field; risk management in both financial and non-financial institutions.
Download Description
Risk Management introduces and explores the latest financial and hedging techniques in use around the world, and provides the foundation for creating an integrated, consistent, and effective risk management strategy.
Customer Reviews:
Comprehensive and excellent.......2003-01-11
This book is the most comprehensive treatment I've seen of financial risk management, particularly from a banking perspective. It covers both the regulatory and practitioner perspectives of modern risk management -- it's a veritable encyclopedia.
It's drawn from the wealth of experience of the authors, who are well known in both the academic world and on Wall St.
I guess what I like most about the book is the inside look it provides at the various aspects of financial risks -- no other book does it better, and I found the discussion enthralling.
While mainly geared toward banks, the book also includes a fascinating chapter on risk management in regular corporations. I think the book would serve equally well as a textbook for a risk management course or a handbook for the risk management practitioner.
Important stuff but hard slogging.......2002-07-16
This is an encyclopedia, and reading such things is not what most people, even when deeply interested in the subject are likely to do. It does provide a fair reference for specific topics, but this is not a subject one can really pick and choose.
VAR is the ususal starting point, and its famous authors (one of whom I hired for his skill in these matters) cover most of the bases in an interesting way.
Good book on risk management, February 4, 2002.......2002-02-05
I bought this book because some readers highly recommended it. I'm a financial derivatives strategist and risk management consultant. When a reviewed the book I disappointed in five main particular points: 1) The chapter on VaR is unsatisfactory and insufficient. The authors discuss this subject in a general approach. From my view point I have a preference for Jorion's Value At Risk. 2) There is no discussion about GARCH models, which decrease the importance of this book. I recognise "Risk Management" is a great book. It's a vast encyclopaedia of risk. 3) There's a great discussion of all types of risk, but without any practical solved case. This particular point demerit the seriousness and greatness of the book. 4) The level of mathematics in the book is a little advanced and without any support en practical cases, these poor numerical exercises and calculus tools are useless. 5) Montecarlo simulation approach is bad. There is a great discussion on this subject in Hull's Options, Futures and other derivatives, where the theme is practical, objective and concise. Finally and taking into account these five particular disadvantages, I'll give my rating to this book: 3 stars.
Don't miss it.......2001-08-24
I think it the best book about Risk management I read so far. I was impressed even by the way they treat market risk although it does not seem their main interest. The chapter on VaR is much better than a whole book on it. Great!!! Everyone should have a copy...
The best risk management book.......2001-06-14
This is by far the most comprehensive and well-written book on risk management. If you were to read only on book on the subject, there is no doubt you should choose Crouhy, Galai, Mark. The book reflects not only the authors' serious academic background - all of them have been professors at top universities - but also their detailed hands-on experience.
Book Description
From esteemed New Yorker writer Mark Singer comes this cautionary tale of the Penn Square Bank, the oil and gas broker in an Oklahoma City shopping mall whose collapse in 1982 staggered America's banking industry. Recounting the whole spectacular story and its colorful characters, Singer makes brilliantly (and hilariously) clear what actually happened and why it had to happen in boom-time Oklahoma. Nowhere else did money flow in quite the same spontaneous fashion. "[A] tale of wonderful verve" (New York Times), Funny Money comes to life through Singer's vivid prose and continues to resonate in today's culture of corporate corruption.
Customer Reviews:
So that's what happened to the oil business.......2007-09-23
Well written and enjoyable - not a easy thing for such a potentially droll subject. Made a living shutting down oil companies for a while - now I know why.
Entertaining, but a little light.......2006-10-03
As one who lived through this, and is trained in economics and finance, and knew several of the individuals of the era, I enjoyed this book, but found it not as thorough nor displaying a comprehensive grasp of the context of the times as it could have. I felt like the author was striving more to be entertaining and engaging, than to provide a comprehensive historical record or in-depth economic analysis. I would recommend Philip Zweig's "Belly Up, the Story of Penn Square Bank" in its place for those seeking a more in-depth history. Zweig's book is better researched and also does an excellent job of communicating the flavor and energy of those years. I might give Singer's book a 3.6, but I think a 4.0 is too high.
What everyone needs to know.......2005-07-28
Mark Singer has written one of my favorite books ever. It is simple to read and simply hilarious to think that a bank in a shopping maul almost brought down the entire banking industry of the United States and hence the world. Mark Singer's understanding of how this happened and the characters involved in the fiascal leaves the reader with a more profound and terrifying idea of what makes the world go round.
Corrections to reviews.......2003-01-06
As someone who has grown up in Oklahoma City and graduated from high school the year that the collapse had happened, I knew of some of the persons involved through other people.
The red piggy bank logo belonged to Sooner Federal Savings and Loan, and sat on top of 50 Penn Place.
Penn Square Bank had built what is now known as The Tower a couple of blocks down the street. They never moved into it, they were shut down while they were still inside the north end of Penn Square Mall, and the building was finished out after the closure.
Singer has relatives here in Oklahoma in the oil business, so he had some insight into the things that had happened.
If you want more detail, Belly Up goes into much more greater detail and is harsher in it's treatment of the characters involved.
Okiesmo Lives.......2001-02-20
Growing up in Oklahoma my only real memory of the Penn Square Bank failure was when they pulled down the red-piggy-bank logo from the top of the building. It was something that was talked about on the national news every evening, but it wasn't well understood just how such a small local bank could cause such a ruckus.
Mr. Singer's book explains what was at the bottom of all of the trouble, how Penn Square fell from grace, and in the process of doing so provides interesting commentary on Oklahoma culture, as well as some history and other facts pertaining to the oil business. The book is very well written and quick paced, providing just enough detail to be considered in depth, while not languishing on unnecessary detail.
It is interesting to remark that the same conditions that caused everyone to say oil at $100 per barrel was a no-brainer are those that caused people to put forth the indestructible nature of internet-retailing. The Okiesmo of wildcats in pursuit of oil bears striking resemblance to the aggressive idiocy of venture capitalists fighting to put money into business plans that ignored common sense.
This book is satisfying on a lot of levels, the depth of information on the figures behind the bankruptcy, the environment that spawned and incented those figures and also the culture, both nationally and locally, which created this collapse. This is a very interesting book, and I highly recommend it.
Amazon.com
Birth of the Chaordic Age is a compelling manifesto for the future, embedded within the intriguing story of a personal odyssey. An engaging narrator, Dee Hock is the man who first conceived of a global system for the electronic exchange of value, becoming the founder and CEO of VISA International. He looks critically at today's environment of command-and-control institutions and sees organizations that are falling apart, failing to achieve their own purposes let alone addressing the diversity and complexity of society as a whole. The solution, Hock claims, lies in transforming our notion of organization; in embracing the belief that the chaos of competition and the order of cooperation can and do coexist, succeed, even thrive; and in welcoming in the chaordic age.
The underlying tenets of Hock's ideas are well illustrated by the incredible story of the birth of VISA International, an organization formed on chaordic principles that now links in excess of 20,000 financial institutions, 14 million merchants, and 600 million consumers in 220 countries. Hock deplores an age where ingenuity and effort are wasted on circumventing the rules and regulations of insular, hierarchical bureaucracies. In a bold-type subtext interspersed throughout the book, he examines how this situation is stunting our potential as individuals and communities and contemplates what can be changed. This rumination is propelled onward by "Old Monkey Mind" (Hock's own thoughts). Though the technique allows the reader to engage in stimulating mental discovery along with the author, its New Age spiritual tone is sometimes a bit saccharine. His insights, however, are clear and provocative. In the Chaordic Age, he contends, "success will depend less on rote and more on reason; less on the authority of the few and more on the judgment of many; less on compulsion and more on motivation; less on external control of people and more on internal discipline." Hear, hear. --S. Ketchum
Book Description
In Birth of the Chaordic Age, Dee Hock argues that traditional organizational forms can no longer work because organizations have become too complex. Hock advocates a new organizational form that he calls "chaordic, " or simultaneously chaotic and orderly. He credits the worldwide success of VISA with its chaordic structure -- it is owned by its member banks which both compete with each other for customers and must cooperate by honoring one another's transactions across borders and currencies. The book shows how these same chaordic concepts are now being put into practice in a broad range of business, social, community, and government organizations.
Customer Reviews:
Nature teaches us how to get organised.......2007-04-11
Dee Hock spend much time contemplating while being in nature, to which he felt strongly connected. Therefor it came as no surprise that he decided to organise his company, VISA International, following the structures of nature. The resulting enterprise showed flexibility and ingenuity, being able to rapidly respond to changing circumstances. The people it attracted grew a strong sense of responsibility and pride in their contributions. The interconnectedness and mutual trust laid a solid base for creativity and daring. Given the circumstances all were leaders at times and followers at others. A shared passion or spirit of relevance drove them further, growing VISA to a multi trillion business in the process. A beautiful example what can happen if we align ourselves with the forces of nature.
quick service, book in exceptional shape.......2005-08-31
not much to say other than the service was prompt and the book arrived in excellent condition.
More of a personal story than clear vision of chaordic orgs.......2005-03-26
Dee Hock is a man with a rich history. He relates a large part of that personal history in Birth of the Chaordic Age even though, he claims, this is not a story about him, nor about VISA International, although both figure prominently in the tale. The book is not so much a story at all, but a passionate manifesto for the future of business and society as a whole. If almost anyone else had written a book of such grand - perhaps grandiose - pretensions, we would quickly dismiss them. But Hock is known as the founder and former CEO of VISA International. He explains that he founded the organization on "chaordic principles". This business now connects over 20,000 financial institutions, 14 million merchants, and 600 million consumers in 220 countries. That's a compelling argument for allowing the man to speak.
Hock's book is a masterfully written broadside against the dominance of today's command-and-control institutions. He is far from alone in the outlines of his historical perspective. According to this, over the last three centuries we have increasingly sought to structure society according to reductionism, specialization, more technology, more efficiency, more linear education and processes, and more hierarchical command and control. The goal has been to create an organization in which leaders can pull a lever and reliably produce a desired result.
Hock goes further than most who share this perspective when he talks of the "dominator organizations" that have ordered resources and people so as to produce large quantities of uniform goods. Instead of the expected results, claims Hock, what we have produced is "obscene maldistribution of wealth and power, a crumbling ecosphere, and collapsing societies." This apocalyptically gloomy view may be trendy, but has only a passing resemblance to reality. (For a brief alternative view, see "The Truth About the Environment", related to this review.) Readers need not share Hock's assessment of today in order to learn from, agree with, and help to implement his alternative vision of chaordic organizations - those that are simultaneously chaotic and orderly.
The positive vision expounded on in Birth of the Chaordic Age sees organizations of the future as being the embodiment of community, based on shared purpose calling to the higher aspirations of people. Hock puts this general description into more specific form by explaining how a chaordic organization is formed by attending to six elements in the proper order: Purpose, Principles, People, Concept, Structure and Practice.
Hock claims that VISA was formed according to this description - the unusual organization is owned by its member banks, which combine competition for customers with cooperation by honoring each other's transactions across borders and monetary systems. If this is true, then you may persist in reading the book for its vision, despite some annoying peccadilloes, such as Hock's talk of "Old Monkey Mind" (his rational thoughts).
One of the best books on life and business I have read.......2005-02-22
I have two regrets after reading it. One that I can't give it more than 5 stars, and that I did not read it a long time ago. I read this book to learn more about Hock's views on complexity and organization, what he describes as a "chaordic system." While I met that purpose, I also discovered much more.
The personal narrative about failure and disappointment before Hock's leadership in the creation of VISA is something I needed to read years ago before I went through frustrating set-backs in my own career for related reasons.
What's more, Hock's understanding and recommendations for harnessing the power of complex systems is brilliant. If you could read only one book on leadership and complexity, I would strongly encourage this book to be it.
Part of what I find so amazing is that Hock is able to express a great deal of cutting edge philosophy and social science thinking as he tells a business story.
Read this book and share the ideas within with others!
A Fascinating Man, a Fascinating Story & a Bit of Frustratio.......2005-02-07
This is a book that is fascinating and frustrating by turns. It's about one of the most fascinating and effective and least written-about business executives in the world, Dee Hock.
Hock is the founder and CEO Emeritus of Visa. Visa is an organizational form unlike anything anyone had ever seen or, for that matter since. It combined the efforts of organizations that were normally at each other's competitive throats. But that's not all.
In the process of getting Visa to work, Hock and the other folks that he worked with, also managed to create the payment system that is Visa. To realize how big an achievement this is, consider the fact that the check-clearing system in the Federal Reserve still does not work with a fraction of the efficiency of the Visa-approval and payment-clearing process.
I'd known about Dee Hock for years, and I was fascinated by him and by the process that must have gone into establishing, actually inventing, Visa. I snatched up this book when it came out hoping that it would contain the story of Hock and the Visa adventure. It did. That story is compelling and well written.
But there's more to this book than that story, and the "more" includes lots of bits of value and many bits of frustration.
Take the title. Birth of the what Age? "Chaordic." Try looking that up in the dictionary. It's not there. Do we need a brand-new word to describe what Hock is describing? Maybe, but I'm not sure.
I'm quite sure I don't need some of the other strange things that he does with language in the book. There is, for example, "Thee Ancient One." That turns out to be a tractor. Then there's "old monkey mind."
Old monkey mind is the term that Hock uses in several different ways throughout the book. Sometimes it's used to refer to logical, linear, left side of the brain. Sometimes it's used to refer to old thinking patterns. Sometimes it seems to be a kind of alter ego for Hock with whom he has conversations.
That kind of language is cute but it's more appropriate to a book of whimsy. Here it gets in the way of understanding. And there's a lot here to understand.
Whatever else Dee Hock is, he is certainly one of the most fascinating intellects that I've come across. He's clearly a man of principle. He's had an amazing life, starting from poverty, rising to heights of business where he created one of the great financial institutions in the history of the planet. Then he walked away from that achievement with less ongoing compensation than Jack Welch's apartment rentals. Hock's mind is supple and rich and dips into sources that span time and geography and cultures.
Hock's life and the story of Visa are fascinating, and it pulls us along, but there's real meat in his observations about organizations and how they work and how they ought to work. There are penetrating insights into the ways that organizations have an impact on the Planet, on the economy, and on individual lives. There are insights and observations about what it means to be human.
In the end, I think this is really two books. One book is a story that goes from start to finish. It's the story of Dee Hock. It's the story of Visa. It's a fascinating story, filled with lessons and examples. It's worth buying the book that's between the cover for.
Then there's the other book that is a collection of bits of observation and thought. They're not presented in a coherent way, just plopped down into the story in separate chapters throughout the book. This is a book with less organization and more random insights. It, too, is interesting and worth the price of the book.
In the end, you can get two books - both wonderful, for the price of one.
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