News

A new textbook by Prof. Löffler has been released: "Finanzierung". It's an introduction to financial theory (in German).

Current Research

Over the past 100 years, value stocks have outperformed other stocks.  But over the last decade, they have underperformed. Could this be due to increased investor interest in value investing? A study forthcoming in the Journal of Behavioral Finance shows that such fluctations in interest and value premia are nothing new.  It is therefore not obvious that more investor interest will lead to a disappearance of the value effect.

Despite intense criticism, agency credit ratings are still widely used in regulation and risk management. One possible alternative is to replace them with quantitative default risk measures. In a study that is forthcoming in the Journal of Financial Services Research, Prof. Löffler shows that using such measures would reduce systemically relevant losses in bond portfolios and thus help to improve financial stability.

Were the prices of internet and technology stocks really too high in early 2000? Or was the subsequent decline in prices too strong?  A study that is forthcoming in the Financial Review favors the second explanation. Whether there was a speculative bubble or not is thus much more difficult to decide than many observers think.