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Number 3 - November 2008
NEWS
ANALYSIS FROM THE EXPERTS
LATEST PUBLICATIONS
WE ARE RESEARCHING
REMOVING DOUBT
ACTIVITIES
NEWS
IESE Hosts International Meeting on Finance Methods
Barcelona, June16-17, 2008 IESE Prof. Javier Gómez Biscarri was moderator for the second annual workshop organized by the Methods in International Finance Network (MIFN), for which he serves as chairman of the board. The meeting featured the participation of numerous specialists from the field of international finance, who gave presentations focused mainly on financial methods and applications. Read more “The growing public deficit is Spain's main weakness in this crisis”
Madrid, October 9 ,2008  How is the crisis affecting the country? Are the measures being taken by the Spanish government effective? These are some of the questions addressed by Professors Juan José Toribio, José Luís Suárez and Javier Díaz Giménez during the continuous education session titled “La crisis económica. En el ojo del huracán” ["The Economic Crisis: In the Eye of the Hurricane"], which was held at the IESE campus in Madrid. Read more
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ANALYSIS FROM THE EXPERTS
SPECIAL: AT THE EPICENTER OF THE CRISIS
Understanding its Causes to Take Action on its Consequences
October 2008 The so-called subprime crisis began more than a year ago, and it is still difficult today to quantify the depth of the problem or the losses it has caused. It is unknown which banking institutions have assets whose value has plummeted, and it is said to be losses amounting to billions of dollars, which could balloon as new accounting regulations come into force. Meanwhile, the crisis has spread throughout the entire financial system and reached people's pockets. Read more Top
LATEST PUBLICATIONS
Transparency and Supervision: Keys to Avoiding Another Subprime Crisis
Soley, J.
The subprime crisis started with the mortgages that go by the same name, but have ended up affecting the financial system in general and, consequently, investors and private parties. What strategies can help financial institutions overcome this crisis? IESE professor Jorge Soley sifts through these in his technical note “Aspectos financieros de la crisis subprime” [“Financial Aspects of the Subprime Crisis”]. Read more Directors and Professors Treat Market Risk Differently
Fernández, P.
 What market risk premium does your company use? Why is that? Has it always been the same? With the answers to these three questions offered by executives and professors of finance, IESE Prof. Pablo Fernández has put together a report that reveals that the average risk used by companies (6.3%) is greater than that used by those in academia (5.5%). A significant amount of the companies surveyed never use the market risk premium, and those that do, use published books and articles. Over half of the companies interviewed say that the risk premium they used in 2008 is higher than that of 2007, which by contrast occurs with only 15% of the professors surveyed. Read more
Download (PDF, 204 Kb) (In Spanish)
The European M&A industry: Trends, patterns and shortcomings
Campa, JM., Moschieri, C.  This paper provides a comprehensive overview of the process of European mergers and acquisitions. We characterize the main features of M&A activity in Europe in the period 2001-2007. We review the process of M&A regulatory integration and patterns of activity. Most European M&As still take place among domestic firms, although cross-border transactions are larger in value and have been slightly increasing, specially in regulated industries. Transactions are likely to be friendly, partially negotiated via public tender offers and private deals, and paid in cash, specially for smaller deals. Competing bids are still fairly rare and less likely to be completed. Target shareholders obtain an average premium around 20 percent and this premium is slightly declining with deal size. Regulatory differences are large, particularly in the application of takeover regulations and uncertainty persists in the predictability of the national regulatory agencies. Download (PDF, 392 Kb)
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WE ARE RESEARCHING
Banking Models for the Low-Income Segments
Santomá, J. y Prior, F.
The creation of sound financial systems is one of the main challenges faced by developing countries. The lack of access to financial services by people in these countries seems to be the primary obstacle in the way of that goal. However, this phenomenon is not exclusive to economies of this nature: in many developed countries, the United States among them, the lower strata of the population suffers from extremely limited banking access due to problems in the design of both products and distribution channels. To solve these problems, IESE Prof. Javier Santomá and associate researcher Francesc Prior analyze the access to financial services in Latin America, Maghreb, Sub-Saharan Africa and the United States. Read more Top
REMOVING DOUBT
What is private equity?
By Jorge Soley Sans 
It is the provision of capital in the medium and long terms to companies that are not listed on the securities market. The goal is for these companies to achieve greater gains than what they would on the stock market, whether that entails supporting them in their expansion phase, becoming actively involved in their management, or optimizing the company's financial structure. Read more
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ACTIVITIES
Corporate Restructuring and Value Creation
Madrid, November 18-20, 2008 As we have already mentioned in this newsletter, the future of numerous sectors entails business restructuring. Given the current situation of slowdown in economic growth and barriers on financing, companies should consider alternatives for optimizing their balance sheet, increasing solvency and obtaining liquidity.
This new focused program at IESE is aimed to provide general managers and those responsible for management control or strategic planning, the instruments needed to evaluate the various investment alternatives, gear the company's activities toward generating cash flow, optimizing its sources of capital, controlling the growth of working capital and reducing fixed costs through outsourcing programs. Read more How to Handle the Crisis: Challenges and Opportunities
Barcelona, November 26, 2008  We are knee-deep in an unprecedented financial crisis, one that is also affecting the real economy. According to the latest report from the International Monetary Fund, the US and the EU are both headed toward recession, and there will be no visible signs of recovery until late 2009. To understand how we can take on the crisis as well as learn from it, IESE has developed a focused program whose multidisciplinary perspective will guide you in designing a business strategy that will not only help you weather the storm, but also allow you to implement changes to bolster your business in the future. Read more
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