Basic research centre for CBS

Professor David Lando has just initiated contractual negotiations with the Danish National Research Foundation.

DKK 585 million will be invested in 11 new basic research centres, and Professor David Lando from the Department of Finance is one of the researchers who are currently negotiating a contract with the foundation. He says that the purpose of the research within the centre is to fulfil a need to understand why financial crises arise, how the market reacts during a crisis and not least how legislators, central banks and other regulatory authorities help recover the market in the best way possible after the crisis.  

A boost for the financial milieu in Denmark

The new centres will be established for a period of 6 years with a possible extension of further 4 years. According to David Lando, such a long-term grant offers very unique opportunities for the centre 'Friction-finance Research Initiative Copenhagen’ (FRIC).

- This is a fantastic chance to create increased activity at the highest level within financial economics. We will be able to stimulate the financial milieu, not only at CBS, but everywhere in Denmark through workshops, PhD programmes, conferences and the like, he explains.

In the wake of the financial crisis, practitioners and legislators are working hard to restructure the industry, and Denmark can now be at the cutting edge in this respect - also on an academic basis. 

The researchers will study frictions and imbalances that affect the pricing in the financial market; both naturally occurring such as European banks' poor access to dollars, as we are experiencing at the moment, but also the initiatives that are launched to regulate the market, e.g. ban on short selling, where securities are lent out with the purpose of being bought back for a lower price. 

Societal relevance

The foundation is ready to grant up to DKK 48 million to the research centre. Acting President Alan Irwin is very pleased. 

- We are delighted that the work of David Lando and colleagues has been recognised - and supported - in this way. Research in FRIC fits entirely with the CBS mission of bringing together world-class excellence and high societal relevance, he says.

FRIC

If the negotiations proceed as planned, the new centre is a reality on 1 March 2012.

The following researchers from CBS are the core of FRIC: Professor David Lando, Professor Søren Hvidkjær, Professor Kristian R. Miltersen, Associate Professor Jesper Lund and Professor Lasse H. Pedersen. 

Furthermore, researchers from the University of Copenhagen, the University of Toronto, the University of St.Gallen and the Northwestern University will be affiliated with the centre.