Comment on the hiring of a former Wall Street trader
The Department of Finance has hired Fabrice Tourre as an Assistant Professor effective as of 15 august. The Danish media has shown lots of interest in the matter, which is why CBS gives this statement on the reasoning behind the hire and the faculty member’s background.
CBS distances itself from any kind of unethical behaviour, including that of Fabrice Tourre in connection with his involvement with Goldman Sachs in a large deal in 2007. Fabrice Tourre received a substantial fine in civil court of USD 850,000. CBS was aware of the case when Tourre was hired on as Assistant Professor effective as of 15 August. The hiring of Fabrice Tourre was made mainly on the basis of two motivating factors. First, Fabrice Tourre is uniquely competent in the intersection of macroeconomics and finance. As a researcher, he has developed sophisticated theoretical models for the understanding of risk factors associated with government bonds. Among other things, his models can be used to better understand the underlying factors of the debt crises in Latin America in the 1980s and Asia in the 1990s. Through this understanding, similar crises may be avoided in the future.
Second, CBS does not believe that past transgressions should result in a lifelong exclusion from research and teaching if a candidate has been transparent about such transgressions, has participated in their public remediation and/or has shown that any repeat of such transgressions can be ruled out. It is worth noting in this context that Fabrice Tourre was never banned by the Securities and Exchange Commission (equivalent to Finanstilsynet in Denmark) from working in a position in a financial institution and could have continued to work on Wall Street.
He left the financial sector in 2012 to become a PhD student in economics at the University of Chicago. Subsequently, he was employed at Northwestern University. Both universities are among the absolute global elite within the field of economics.
Thus Fabrice Tourre has shown both great willingness to and capability of contributing to research at the very top level to the benefit of our students and society. We have faith in Fabrice Tourre’s capabilities in research as well as in teaching. And we remain confident in our students’ independent and critical assessment of their professors and teaching.