Training ground for the banking elite
The Swiss Finance Institute (SFI) in Geneva is a classic example of how the National Centres of Competence in Research (NCCRs) shape Swiss educational and research structures: because the NCCR “FINRISK – Financial Evaluation and Risk Management" was a key pillar in the foundation of the SFI.
Despite being a leading international financial centre, Switzerland long lagged behind in terms of outstanding research in the field of finance. Things have now changed and Swiss finance experts are at the forefront of research. This development is largely due to the NCCR "FINRISK ". The universities of Zurich, Geneva, Lausanne and Lugano, as well as EPF Lausanne and ETH Zurich, joined forces in the NCCR “FINRISK” to create an efficient research network. The Swiss Finance Institute (SFI) was then founded in 2006, a public-private partnership of the Swiss Bankers Association, the SIX Swiss Exchange and the six universities participating in the NCCR. "The NCCR was a key pillar in the foundation of the SFI," comments its Director, Jean-Pierre Danthine. He is professor of macro economics and financial theory at the University of Lausanne and was elected to the governing board of the Swiss National Bank for 2010.
On the one hand, the Swiss Finance Institute is dedicated to training executives in the financial industry, on the other hand it aims to support financial research in Switzerland. "In a way, we are the research department of the SFI," comments Rajna Gibson, Professor of finance at the University of Geneva and Director of the NCCR “FINRISK”.
The foundation and development of the Swiss Finance Institute is a classic example of how an NCCR can contribute to the permanent, coordinated development of training and research structures in Switzerland. At the beginning of this century, financial research and training in Switzerland was still highly segmented and uncoordinated as a result. In 2003, Pierre Mirabaud, as the new president of the Swiss Bankers Association, not surprisingly, demanded "a concentration of efforts at the various universities in Switzerland in support of a centre of excellence". To a certain extent he was preaching to the converted, because the NCCR “FINRISK” was already pursuing similar goals. In 2006, the Swiss Finance Institute, originating from the NCCR, started its work. The SFI has ambitious aims: in the medium term it aims to be one of the three leading financial institutions in Europe and to become one of the top ten worldwide.
It is already evident that the NCCR “FINRISK” has made its mark. The establishment of the Swiss Finance Institute alone has considerably advanced Swiss research and made the financial sector more competitive than ever. The NCCR “FINRISK” and SFI now jointly run the world’s largest doctoral program for financial experts. Eighty-five students, selected according to rigorous standards, take part in the program at four Swiss universities. Distinguished professors are flown in from all over the world for the advanced courses. The new structures permitted the creation of 30 new finance professorships, and further appointments are in the pipeline. A tenure track program for young researchers was also established and 18 professors have already benefited from it.
The partnership has also borne fruit in an academic context. Consequently, new research fields like Neuro Finance have been established at Swiss universities. And in the research work supported as part of the NCCR “FINRISK” and SFI, the number of publications in top journals is substantially higher than average.
Nevertheless, the NCCR “FINRISK” researchers are in a difficult position – at least from the public perception. After all, none of them saw the financial crisis coming even though risk management within the international financial system is their area of specialization. Incidentally, neither did their colleagues abroad. "It’s a lesson in humility for academic research," comments Rajna Gibson. "Our models still provide insufficient feedback about the repercussions; we still have a lot to do in this area."