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At first, it does not compute: what is a stock market specialist doing on the faculty of SIPA, the School of International and Public Affairs? Some may wonder, but for both the school and the specialist in question, Ailsa Röell, it makes perfect sense.
"We were in the midst of reviewing our International Finance and Policy concentration, wondering how to meet the growing demand," says SIPA Dean Lisa Anderson, "particularly as there are so few specialists who can, and want, to teach finance as both a tool and an arena of policy." This approach distinguishes SIPA from its public policy school peers, which do not typically have strong programs in finance, as well as from business schools, which are strong in finance but do not stress the policy angle.
"That was when we happened upon Ailsa Röell, one of the best in the world for this rare combination."
Likewise for Röell, who for the past eight years had been a senior research scholar at Princeton University's Bendheim Center for Finance, SIPA represented a chance to take her career in an interesting new direction.
True, it would mean teaching courses outside of her specialized research interest in stock market microstructure: the ways stock markets organize and regulate their trading systems, and what that means for traders' strategies, liquidity and price formation.
But this is precisely why she found the prospect so appealing.
"I liked the idea of designing courses that would be helpful to those going into the public policy world,"Röell says. "By the same token, I was intrigued to learn that SIPA students were pursuing a very wide range of careers in finance, spanning the public and private sectors. The challenge would be to provide a corresponding range of skills."
Röell's own career in finance began more than 20 years ago when she was pursuing her M.Sc. in economics at the University of Groningen in her native Holland, followed by a Ph.D. in political economy at Johns Hopkins. At that time, financial economics was still in its nascent stages, Röell explains, and she found the lure of the new field irresistible, particularly after she was offered a lectureship at the London School of Economics.
"That was the time when Mervyn King, now the governor of the Bank of England, and monetary economist Charles Goodhart were setting up a research center at LSE to study financial markets,"she explains. " I was hooked."
Since then, of course, the field of international finance has exploded, accounting for why so many graduate students are choosing to concentrate in this area -- which at SIPA is called International Finance and Policy, or IFP (it used to be called International Finance and Business but was renamed last fall to indicate the program's tighter focus on the interaction of financial markets, policy and regulation).
SIPA's IFP students are required to take courses on topics such as international banking, international capital markets, and international monetary theory. Traditionally, they have attended Columbia Business School as well as at the Graduate School of Arts and Science for a significant part of their coursework; but with the help of Röell and other new faculty appointments, the school will soon be offering more courses tailored to policy students' specific interests and needs.
Since joining SIPA in September, Röell has been teaching IFP's core course in corporate finance, and she is now putting together a specialized course, to be offered next year, exploring the economics of corporate governance -- looking at theory and evidence about how firms are governed and what it means for their economic performance, as well as comparing laws and financial market institutions relating to corporate governance across various countries.
For instance, students will be learning about the impact of Securities & Exchange Commission policies on the functioning of financial markets, and of legal reforms such as the 2002 Sarbanes-Oxley Act, an important federal reform precipitated by corporate scandals like Enron.
Comments SIPA associate dean Robert Garris, "The IFP curriculum focuses very specifically on the intersection of public and private sector financial issues. Professor Röell's new course fits into this model."
At Columbia, Röell spends more time on teaching than she used to at Princeton, but she still somehow manages to pursue her own research on executive compensation, having recently co-authored a study looking at whether corporations where management pay is sensitive to share price are more prone to stock price manipulation.
She has also been taking advantage of the interdisciplinary opportunities Columbia offers, collaborating with SIPA and economics professor Bentley MacLeod on running the seminar "Law, Finance and Economic Organization."
One of Röell's frequent collaborators is her husband, Patrick Bolton, the David Zalaznick Professor of Business at the economics department and the business school. Indeed, her story would not be complete without mentioning Bolton as a further compelling reason for her move to Columbia.
The couple, who met 20 years ago at LSE, are by now accustomed to what it means to be a dual-career academic family -- the challenge of finding a situation where both can advance their careers while raising their 12-year-old son.
"We were very lucky that Columbia could offer both of us such exciting opportunities," Röell says, mentioning that she and Bolton are already engaged in furthering their work on corporate governance (before leaving Princeton, they completed a major survey of corporate governance for the Handbook of the Economics of Finance).
But if Columbia is proving an ideal home for a person of Röell's interests and circumstances, one further reason she is thriving is the expanded horizons SIPA provides.
"Every day I enter the International Affairs building I am fighting temptation -- seeing all the posters about things I can attend that have very little to do with finance," Röell says, smiling.
For more on SIPA's IFP concentration, go to: www.sipa.columbia.edu/academics/concentrations/ifp.html
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