Fifteen years at Gerzensee Editorial

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					newsletter                                             S T U D Y         C E N T E R
                                                                                                              Au g u s t

                                                                                               G E R Z E N S E E

                                                                                                              by Georg Rich,
                                                                                        Chief Economist, Swiss National Bank
Editorial                             Fifteen years at Gerzensee
The Study Center Gerzensee has
become 15 years of age. Despite
its youth, the Center has already
reached a high level of maturity
and its main activities are well
known worldwide. In this issue,
                                      E      arly in the 1980s, the Swiss National Bank (SNB)
                                             purchased the Chateau of Gerzensee and began to
                                      renovate and extend the newly acquired facility. Although
Dr. Georg Rich, chief economist       it intended to establish a Study Center, it had only the
at the Swiss National Bank and
member of the Foundation Council      vaguest of ideas about the role the Gerzensee facility
from its inception, reviews some      might play. Various proposals about possible functions of
of the main developments of the
Center. This newsletter also gives    the future Study Center were being floated at that time. Key SNB officials toyed
an overview of our recent activi-     with the idea of setting up a training program for central bankers around the
ties. It describes two exciting new
courses that have been present-       world, especially from the less developed and emerging market countries.
ed to central bankers this spring:    However, the SNB lacked the requisite experience with such programs. There was
a course on new methods in em-
pirical finance and another on        also talk about providing a service to the domestic economy by offering courses
financial crises. The great inter-    on various aspects of Swiss economic policy that would appeal to practitioners in
est generated by these advanced
courses illustrates the worldwide     banking and industry. Finally, Jürg Niehans, a well-known Swiss economics
trend towards deeper economic         professor, tried to convince the SNB that the Study Center should be turned into
analysis at central banks. One of
our aims is to continue to provide    an economics graduate school to supplement the PhD-programs at the various
a small contribution towards this     Swiss universities.

We also hosted several interna-       In 1985, about a year prior to the opening of the new facility, I was appointed to
tional conferences. The Summer
Symposiums in Economic Theory
                                      the Foundation Board of the Study Center and asked to chair the Board's
and in Financial Markets, organ-      Educational Committee, charged with developing the courses to be offered at
ized jointly with the Center of
Economic Policy Research (CEPR),
                                      Gerzensee. The Committee worked hard to transform the vague ideas about the
has attracted more than 150           Study Center's potential activities into a concrete program of course offerings.
academic economists this year.
                                      Since the Study Center was scheduled to open in the spring of 1986, we had little
The small village of Gerzensee
has thus become a major focal         time to complete our work.
point in Europe for academic
economists. The records show
that these meetings have been         Our priority was to develop a course for central bankers from other countries. In
quite productive and have a sig-      this endeavour, we relied extensively on the experience of the IMF and the Federal
nificant impact on research
activities in Europe.                 Reserve Bank of New York, which had offered similar courses for a long time. The
                                      first central bankers' course was launched immediately after the inauguration of
Prof. Philippe Bacchetta,
Director                              the Study Center. I must confess that we awaited the end of the course with
                                      considerable trepidation as a failure would have boded ill for the future of our
                                      new venture. Fortunately, and to our great relief, the first central bankers' course

• Fifteen years at Gerzensee
• Central Bankers Courses
• Academic Conferences
• Working Papers
• Open House

turned out to be a success and served as a crucial stepping stone for building up
a reputation in the field of training central bankers. In the meantime, the central
bankers' courses have become the central pillar of the Study Center's educational
efforts, with central bankers from virtually every corner of the world coming to

We were less successful in our efforts to develop courses for domestic practi-
tioners as demand for such instruction proved to be negligible. The courses in
finance that the Study Center offered for several years were the exception. They
appealed to practitioners working in the banking sector. Thanks to Professor
Walter Wasserfallen, the late second director of the Study Center and a highly
competent expert in the area of finance, we were well equipped to offer such
courses. However, in the meantime, plenty of other institutions have started to
supply instruction in finance. Therefore, we no longer see any need to remain
active in the finance area.

Another important decision was to get involved in graduate education for eco-
nomics students. In collaboration with all the Swiss universities featuring PhD
programs in economics, the Study Center offers a twelve-week course, covering
microeconomics, macroeconomics and econometrics at a level typical for the first
year in a US graduate school. In addition, the Study Center organizes one-week
courses on specialized subjects. The students taking these courses are enrolled
in local PhD programs and designated by their respective universities. Normally,
they get credit from their universities for taking courses at Gerzensee. Swiss uni-
versities greatly appreciate the Study Center’s contribution to graduate education
in economics. We believe that we can render a useful service to Swiss universi-
ties, even though we only implemented a small part of the proposal originally
developed by Jürg Niehans.

Finally, I should not forget to mention the Study Center’s achievements in the
research area. Walter Wasserfallen realized that research was important if the
Study Center’s educational efforts were to rest on a solid footing. Professor
Philippe Bacchetta, his successor as director of the Study Center, relentlessly con-
tinues to enhance the quality of its research activities. Since the Study Center has
acquired a good reputation in the research area, it has also turned into a popular
place for academic conferences, which it organizes either on its own or in col-
laboration with other research institutions. In this way, the Study Center has
become well known not only among central banks but also among academics
around the world.
                                                                             newsletter             S T U D Y   C E N T E R

                                                                                                                              G E R Z E N S E E

  Central Bankers’ Courses
Understanding                    tion among participants          tion in the banking-currency     could predict crises. Since
Financial Crises                 were a welcome and invalu-       panics context. Finally,         Andrew Rose has himself
                                 able input in the course.        Philippe Bacchetta               developed some of these
The recent waves of finan-                                        reviewed the literature          methods and has used them
cial crises in emerging mar-     Moreover, since all partici-     focusing on financial imbal-     in a large number of projects,
kets have made them the          pants had a good knowledge       ances in the corporate sector    he could go far beyond a
focus of attention at most       of the general topic, the        and concluded the theoreti-      simple description of meth-
central banks. What are the      course could delve deeper        cal part.                        ods and reveal many of the
causes of these crises? How      into the important details of                                     secrets to good empirical
could they be avoided or         crises. We divided the course    In particular, Philippe          work. He also discussed sev-
predicted? What is the opti-     into two main parts, one         Bacchetta presented his          eral shortcomings of the
mal monetary policy              theoretical and the other        recent work (with co-authors     data and in the application
response in the context          empirical.                       Professors Philippe Aghion,      of these methods. Professor
of crises? What is the best                                       Harvard University and           Beatrice Weder (Universities
strategy in the aftermath of     In the theoretical part we       University College London        of Basel and Mainz) com-
a crisis? These are some of      reviewed the main models                                          plemented these lectures
the questions that are of        (or arguments) proposed in                                        by presenting her recent
great concern to policy          the literature. Although sev-                                     work on contagion across
makers.                          eral theories are rather                                          banking sectors.
                                 sophisticated and technically
In our continuing effort to      demanding, we presented                                           Finally, hands-on projects
provide the most relevant        the main insights and opened                                      represented a major ele-
and useful courses to cen-       the class to interesting dis-                                     ment of the course. In the
tral bankers, we developed       cussions. Professor Philippe                                      first week, participants
a course examining these         Bacchetta started with a                                          worked on methodological
questions. The course,           brief review of the early        Professor Philippe Bacchetta     data issues, such as the con-
addressed to research            models of currency crises                                         struction of "exchange mar-
economists and entitled          and examined how strategic       as well as Abhijit Banerjee,     ket pressure indices" or the
“Understanding Financial         interactions among investors     Massachusetts Institute of       use of probit analysis in
Crises”, was presented for       could lead to multiple equi-     Technology) on credit-con-       panel data. They also recre-
the second time last June. It    libria. Then he turned to        strained firms stressing the     ated crisis situations with the
was particularly successful      more recent developments         role of foreign currency debt.   simulation game developed
since it enlisted a wide array   that give financial factors a    He also showed how crises        at the Study Center. Much
of well-prepared researchers     central role and often predict   can be linked to the level of    of the second week was
who had a strong interest in     "twin" crises, which involve     financial development and
the issue. Several central       both the banking sector and      to the liberalization of capi-
bankers came from crises         the foreign exchange mar-        tal flows. Policy implications
nations such as Korea,           ket. We also addressed the       were considered and dis-
Thailand, Indonesia, and         impact of government             cussed throughout these
Turkey, as well as Scandina-     bailouts and moral hazard        presentations.
                                 from lenders. The next part
                                 of the course focused on the     Professor Andrew Rose
                                 “third generation” of crisis     (University of California
                                 models. Professor Jeffrey        at Berkeley) directed the
                                 Nilsen explained the             empirical section of the         Professor Andrew Rose
                                 mechanics of banking pan-        course. He reviewed the
                                 ics and showed how they          various methods used to          devoted to work on a more
                                 could be correlated with         analyze crises. These meth-      substantial project. Each
                                 speculative attacks on the       ods typically have three         group of three participants
vian countries that had          national currency. Professor     objectives: i) to uncover ex-    defined a project and had it
experienced crises earlier in    Jean-Charles Rochet              post the factors explaining      approved by Andrew Rose
the nineties. Other partici-     (Université des Sciences         crises; ii) to determine which   before developing and exe-
pants had done extensive         Sociales,Toulouse) presented     countries are more sensitive     cuting it. Finally, the groups
research on the subject. The     recent work that studied the     to crises and contagion; iii)    presented their results to
experience and the interac-      role of imperfect informa-       to construct indicators that     the class. Projects included

a cross-country analysis of      Empirical Methods in             Thierry Foucault (HEC)
the impact of financial fac-     Finance: New Tasks for           and Caspar de Vries
tors and country studies such    Central Bankers                  (University of Rotterdam).
as one on the Turkish crisis.                                     The participants were a
Throughout the week,             The rapid development of         group of 25 highly motivated
Andrew Rose interacted           financial markets in many        research economists from
intensively with the groups      countries has important          various central banks
                                 implications for central         around the world.
                                 bank policies. Importantly, it
                                 imposes new constraints on       The course was organized
                                 monetary policy and makes        around four topics useful to
                                 necessary closer monitoring      central bank researchers:
                                 of the performance and effi-     the information content of       feature to invert option
                                 ciency of financial markets.     derivatives; the analysis of     prices. Thus transformed,
                                 As a consequence, central        extreme events; institutional    they reveal the shape of the
                                 bankers devote increasing        and regulatory aspects of        density that indicates expec-
                                 attention to analyzing these     financial markets; and an        tations of the value of the
                                 markets. This more intense       examination of insider trad-     future price processes.
                                 interest can be witnessed        ing. The first topic began
                                 in several of our courses,       with an examination of why       These densities may be
                                 where many participants ask      derivative prices give a for-    viewed as an early warning
The computer room during         for a deeper understanding       ward-looking measure of          signal. For instance, we dis-
our speculative attack game      of empirical methods in          potential market evolution.      cussed the fact that a few
                                 finance. In order to meet        During the first course ses-     days prior to President
to guide them in the elabo-      this demand, we composed         sions, participants familiar-    Chirac’s announcement of
ration of their project. The     a survey of these methods        ized themselves with the         a surprise election in 1997,
Study Center’s assistants        in a course held for the         institutional and practical      financial markets already
also provided active support.    first time in March 2001.        aspects of futures and           knew about the election.
Participants invested a great    Professors Michael               options markets. After devel-    Clearly, if such an informa-
deal of energy and long          Rockinger (HEC School of         oping the traditional pricing    tion leak occurs, financial
working hours in these proj-     Management in Paris) and         relations (in the spirit of      series such as the term struc-
ects. Since they learned a lot                                    Black-Scholes and Merton),       ture of interest rates can
from them, they felt that                                         participants inspected actual    also provide an indication.
this investment was fully                                         options data to discover that    The probability density
worthwhile.                                                       the standard option-pricing      uncovered by options offers
                                                                  model fails. A likely reason     an improvement though, for
                                                                  is that the behavior of the      it allows a more detailed
                                                                  asset underlying the option      assessment of future rates.
                                                                  does not behave as tradition-    This density will portray the
                                                                  ally assumed (that returns       likelihood that the rate is
                                                                  follow a normal distribu-        within certain limits, giving it
                                                                  tion). For instance, the price   an advantage over a single
                                                                  process may have jumps, its      measure. We discussed other
                                                                  volatility may be stochasti-     applications, for instance
                                                                  cally changing, or its process   how investors anticipate the
                                                                  may even change in nature.       magnitude of an exchange
                                                                  This uncertainty in the price    rate devaluation. This makes
                                                                  process means that options       it possible to verify whether
                                 Profesor Michael Rockinger       cannot be perfectly hedged,      a policy is deemed credible
                                                                  and in turn that options are     or not.
                                 Professor Jeffrey H. Nilsen      risky, introducing a role for
                                 made the advance organiza-       market participants’ prefer-     In the second part of the
                                 tion. Michael Rockinger was      ences in options pricing. In     course, participants consid-
                                 also the lead teacher in a       recent years many central        ered the frequency of
                                 team including Professors        banks have come to use this      extreme events in historical
                                                                            newsletter            S T U D Y   C E N T E R

                                                                                                                            G E R Z E N S E E

data. For central banks, an     must assess the quality of       used in different ways. For
understanding of the fre-       information distributed by       instance, the asymmetric-
quency of stock market          firms and measure the effi-      information component
crashes or extreme realiza-     ciency of their markets.         yields an alternative meas-
tions in other financial mar-   Thierry Foucault gave lec-       ure of investors’ perception
kets is crucial to gauge how    tures on market microstruc-      of the riskiness of the for-
often they will be called       ture, a theory that focuses      eign exchange market.
upon to intervene in the        on individual strategic
markets. Interestingly, the     behavior and the processes       After the participants had
measure of past crashes may     by which market prices           learned about the actual
also yield results about the    eventually emerge. Market-       operations of various mar-
occurrence and magnitude        makers typically quote an        kets, they devoted the final
of future extreme realiza-      ask (the price at which a        two days to studying how
tions. Caspar de Vries dis-     market maker is willing to       insider trading could be
cussed these techniques.        sell an asset) and a bid price   detected. Since the detec-
According to simple statisti-   (the price at which he is        tion of insider trading
cal theory, financial returns   willing to purchase). The        involves the implementation
are distributed normally.       difference between the ask       of event studies, participants
Looking at the distribution                                      were given data from vari-
of extreme realizations aris-                                    ous French companies. They
ing from a series of normal                                      found that there is abnormal
distributions, however, an                                       volatility lasting two days
observer would discover                                          around earnings announce-
they follow a so-called                                          ments. This finding was
Gumbel distribution. In this                                     obviously not interpreted to
case, extreme realizations                                       mean that insider trading
die out quickly and moments                                      occurs in France, but was
such as skewness and kurto-                                      used in illustrating how
sis also exist. In financial                                     event studies are to be per-
data, however, there are too                                     formed. The importance of
many extreme realizations                                        regulation for the future
to be compatible with a nor-                                     development of financial
mal distribution. This well-                                     markets was also discussed.
known feature of the data
would not justify using         Professor Thierry Foucault       Each day included a theo-
extreme value theory, except                                     retical session in the morning
that it gives highly accurate   and the bid prices is called     that familiarized the partici-
measurement of the proba-       the spread. Participants         pants with the concepts. In
bility of very extreme real-    learned how to use the evo-      the afternoons, these con-
izations. For instance, a       lution of the spread through     cepts were applied to actual
threshold value we compute      time to infer the impact of      data in exercises or case
will not be exceeded with a     news on the market. It was       studies. Participants could
probability of 0.9999. Such     shown that the spread is         solve exercises individually,
a measure has clear impor-      composed of an inventory,        in groups or in the computer
tance for regulatory purposes   a transaction-cost, and an       lab. Professor Monique Ebell
and for understanding risk      asymmetric-information           helped direct various exer-
management. Financial prac-     component. These compo-          cise sessions while the Study
titioners call such a measure   nents can be identified using    Center’s doctoral students
the "Value at Risk".            existing models and avail-       also assisted with exercises.
                                able data (e.g. the transac-     Finally, a few participants
In the second week, partici-    tion price, whether a trade      presented research in their
pants learned about institu-    occurred at the bid or ask,      area of specialization.
tional and regulatory           and the volume). These
aspects of financial markets.   estimates of the evolution
Central bank researchers        of the components may be

Academic Conferences
European Summer                 Oxford), Georg Nöldeke            This year, the focus sessions   European Summer
Symposium in Economic           (Universität Bonn), Klaus         were on the following topics:   Symposium in Financial
Theory (ESSET)                  Schmidt (Universität                                              Markets (ESSFM)
                                München), and Xavier              • Efficiency in Auctions
The month of July at            Vives (Institut d’Anàlisi         and Market Structure            From July 16 - 27, the Study
Gerzensee is often consid-      Econòmica, Barcelona).            (Eric Maskin, Institute for     Center hosted the 12th edi-
ered a summer camp for          More than eighty partici-         Advanced Study, Princeton       tion of this symposium or-
economists. Even though         pants attended part or the        and Benny Moldovanu,            ganized jointly with CEPR,
the Study Center still hosts    whole two weeks of ESSET.         Universität Mannheim)           and sponsored in part by the
external customers, its main    As in previous years, the                                         New York Stock Exchange.
activity is hosting the Euro-                                     • Competition in Network        The organizers were Pierre
pean Summer Symposiums                                            Industries (Mark Armstrong      Hillion (INSEAD), Ernst-
in Economic Theory and in                                         and Patrick Rey, Université     Ludwig von Thadden
Financial Markets. During                                         des Sciences Sociales,          (Université de Lausanne),
four weeks, some of the most                                      Toulouse)                       and Philippe Bacchetta.
reputed economists interact                                                                       The call for papers that was
with a large number of                                            • Market Determinants           issued last fall for this con-
promising younger, mostly                                         of Organization (Gene           ference received more than
European, economists. For                                         Grossman, Princeton             200 applications. Given that
                                Benny Moldovanu and
example, Nobel Prize winner                                       University and Elhanan          the Study Center can host
                                Xavier Vives
Sir James Mirrlees stayed                                         Helpman, Universities of        only about 50 participants at
for two weeks at Gerzensee      symposium was composed            Tel-Aviv and Harvard, as        a given time, the selection
and was one of the 150 econ-    of three types of presenta-       well as Andrew Newman           was particularly difficult
omists who attended these       tions: i) focus sessions, where   University College London)      and a number of excellent
meetings. The full programs     a full morning is dedicated                                       applicants could not be
and the lists of participants   to a specific topic, usually      • Behavioral Contract           invited.
are available on our home-      with three or four presenta-      Theory (Ernst Fehr,
page at www.szgerzensee.        tions; ii) formal paper presen-   Universität Zürich and          In order to allow as many
ch/conferences.                 tations, typically one paper      Klaus Schmidt Universität       researchers to participate
                                per morning; iii) more infor-     München)                        as possible, the conference
                                mal evening presentations                                         was essentially split into two
                                having parallel sessions.                                         parts. During the first week,
                                Afternoons were left free                                         the focus was on Asset
                                for individual or joint work.                                     Pricing, while the second
                                This format does not allow                                        week concentrated on
                                all participants to present                                       Corporate Finance. Most
                                their work, but many take                                         participants attended only
                                the opportunity to be at                                          the week corresponding to
                                Gerzensee to work with                                            their broad field of research.
                                                                  James Mirrlees, Meg Meyer,
Elhanan Helpman and             their co-authors or to start                                      This made for very lively
                                                                  and other participants
Gene Grossman                   new collaborations.                                               and well-focused discus-
From July 2 - 13, the Study
Center hosted the 6th edi-                                                                        The format of ESSFM is
tion of this symposium or-                                                                        similar to ESSET, except that
ganized jointly with CEPR,                                                                        there are two formal paper
and sponsored in part by                                                                          presentations per morning
the Review of Economic                                                                            and that a discussant is
Studies. The program organ-                                                                       assigned to each of these
izers were Philippe Jéhiel                                                                        papers. The focus sessions
(CERAS, Paris) and Patrick      Philippe Bacchetta and                                            were the following:
Legros (ECARE, Brussels),       Philippe Aguion
while the other members of                                                                        • Experimental Financial
the organizing committee                                                                          Markets (Peter Bossaerts,
were Philippe Bacchetta,                                                                          California Institute of
Margaret Meyer (Nuffield                                                                          Technology)
College, University of
                                                                              newsletter             S T U D Y   C E N T E R

                                                                                                                               G E R Z E N S E E

• Behavioral Finance              the design of contracts. One     Intrinsic Motivation
(Nicholas Barberis,               of its highlights was a criti-   in Law and Business
University of Chicago)            cal analysis in retrospect (a
                                  tentative ex post evaluation)    From June 18 – 22, the            Program
• International Corporate         of the sequence of               Study Center Gerzensee
Finance (Raghuram Rajan,          European UMTS/ITM-2000           invited ten American and
University of Chicago)            License Auctions held over                                         • Reciprocity and the
                                                                   European scholars in eco-
                                  the past few years.                                                Welfare State (Herbert
                                                                   nomics, law, psychology and
                                                                                                     Gintis, University of
                                                                   sociology, as well as political
Theoretischer                     Program                                                            Massachusetts)
                                                                   sciences to debate issues on
Ausschuss des Vereins                                              the theory and application
für Socialpolitik                 Gerhard Orosel,                  of internal motivation.           • Intrinsic Motivation
                                  Universität Wien                                                   in a New Light (Siegwart
The Economic Theory               "Credits, Crises and Capital     Intrinsically motivated
                                                                                                     Lindenberg, University of
Group of the German               Controls: A Microeconomic        people bring creativity to
Economic Association              Analysis"                        production and governance
(Theoretischer Ausschuss                                           without extensive supervi-
                                                                                                     • Policies that Crowd Out
des Vereins für Socialpolitik)    Hans Gersbach,                   sion, whereas externally
                                                                                                     Reciprocity and Collective
held its annual meeting at        Universität Heidelberg           motivated people require
                                                                                                     Action (Elinor Ostrom,
the Study Center Gerzensee        "Double Majority Rules           intensive monitoring and
                                                                                                     Indiana University)
from April 26 - 28, 2001.         and Flexible Costs"              extensive rewards. It is obvi-
This conference brought                                            ous that purely intrinsic and
                                                                                                     • Motivation Transfer Effects
together leading German-          Georg Kirchsteiger,              extrinsic motivations are
                                                                                                     (Bruno Frey, Universität
speaking economic theorists       Universität Wien                 extremes on a spectrum.
from Austria, Germany, and        "A Theory of Sequential          Participants met each
Switzerland.                      Reciprocity"                     morning to present their          • Intrinsic Motivation and
The principal goal of these                                        respective papers with the        the Law (Michael Baurmann,
meetings is to foster and         Benny Moldovanu,                 afternoons dedicated to           Heinrich Heine Universität
disseminate research in the       Universität Mannheim             general discussion.               Düsseldorf)
fundamentals of economic          "The European
theory and mathematical           UMTS/IMT- 2000 Licence           The authors greatly benefit-
                                                                                                     • Do Good Laws Make
economics. One of its major       Auctions"                        ed from trans-disciplinary
                                                                                                     Good Citizens? (Robert
objectives has always been                                         comments. Yet the afternoon
                                                                                                     Cooter, University of
to present, discuss, and devel-   Klaus Neusser,                   colloquia made it clear that
op the theoretical tools and      Universität Bern                 intrinsic motivation research
models for the analysis of        "A Multisectoral Log-Linear      is still in its early stages.
                                                                                                     • Cognitive Psychology
important current economic        Model of Economic Growth         There is agreement on the
                                                                                                     and Optimal Government
issues. For example, this         with Marshallian                 importance of the subject,
                                                                                                     Design (Jeffrey Rachlinsky,
year's program included           Externalities"                   but the lack of reliable sur-
                                                                                                     Cornell University)
presentations on the causes                                        veys, the debatable external
of international credit crises    Klaus. M. Schmidt,               validity of experiments and
                                                                                                     • Legal Risk Management
and on macroeconomic              Universität München              the difficulties inherent in
                                                                                                     (Gérard Hertig, Swiss
issues related to growth          "Fairness, Incentives, and       event studies cause wide
                                                                                                     Federal Institute of Tech-
with externalities.               Contractual Incompleteness"      divergence of opinion among
                                                                                                     nology Zurich)
During the past few years,                                         experts and ample room for
the primary research focus                                         development of the topic
                                                                                                     • Motivation in a
of some of its members has                                         through future papers and
                                                                                                     Knowledge-Based Theory
been the theory of contracts,                                      conferences.
                                                                                                     of the Firm (Margit
auctions, and mechanism                                                                              Osterloh, Universität
design. The papers presented                                                                         Zürich).
this year covered a broad
spectrum in these fields,
ranging from the theory of
constitutional design to
questions of fairness, reci-
procity, and incentives in
Working Papers                                                                 newsletter               S T U D Y   C E N T E R

                                                                                                                                  G E R Z E N S E E

Don Morgan, Bertrand Rime          Open House
and Philip Strahan:
“Bank Integration and              The Study Center Gerzensee         “Gartensaal”, genuine ceramic
Business Volatility in the U.S.”   celebrates its 15th anniversary    ovens, and beautiful original
                                   this year. The "Mühlebach",        oil paintings. The visitors
01.03                              the stream leading from the        strolled along the well-tended
Bertrand Rime and                  Chateau to the lake, has been      garden grounds, discovered
Kevin J. Stiroh:                   tastefully restored to its natu-   the duck pond, the wine
“The Performance of                ral stone and grass setting        groves, inspected the restau-
Universal Banks: Evidence          after decades as an uninspir-      rant facilities, and were sur-
from Switzerland”                  ing concrete channel. These        prised at the modern art
                                   were sufficient reasons to         tucked into corners of each
                                   open the Study Center on           building. Those who walked
                                   Saturday, June 16, to intro-       to the lake admired the newly
Michael Dueker and
                                   duce our facilities for the        natural "Mühlebach". The
Andreas M. Fischer:
                                   inhabitants of Gerzensee           planting of appropriate vege-
“The Mechanics of a
                                   and surrounding communi-           tation along the "Mühlebach"
Successful Exchange-Rate
                                   ties. Many visitors took the       allows it to offer a habitat to
Peg: Lessons for Emerging
                                   opportunity to view the inte-      a variety of insects and ani-
                                   rior rooms of the New              mals and greatly improves
                                   Castle. The visitors were          the natural reserve quality of
01.01                              impressed with the modern          the lake.
Monique C. Ebell,:                 educational facilities. Yet
“Why are Asset Returns More        next to the modern comput-         See our website for a wide
Volatile during Recessions?        ers, library, and elevator, they   range of pictures for this
A Theoretical Explanation”         found original maps in the         event

Margrit and Anton Ryser
As of the end of March 2001,       culinary delights that left
Margrit and Anton Ryser            a lasting impression on              Dissertation Series
retired from the SV-Service.       the participants. We thank
Since the opening of the           Margrit and Anton Ryser              Martin K. Hess
Study Center Gerzensee,            once again for their worthy          "The Determinants and the Forecastability of Swiss
they have been responsible         service and heartfully wish          Stock Prices", viii/188, ISBN-3-9520416-5-3
for the hotel management           them all the best in their next
and restaurant, and have           phase of life. We are ensured
played an important role for       that the tradition of excel-
the emotional needs of par-        lence will continue as we cor-
ticipants. Margrit Ryser exe-      dially welcome Hans-Ulrich
cuted her management func-         Känel as head of the SV-
tion with devotion and seem-       Service team, and Hansruedi
ingly effortless expertise. She    Schiffmann as chief cook.
impressed our participants
with Swiss efficiency in a
friendly way. Anton Ryser,
the chief cook, was responsi-
ble for the Study Center’s

                                   Mr. and Ms. Ryser                                                  P.O. Box 21
                                                                                                  CH-3115 Gerzensee
                                                                                              Phone: ++41 31 780 31 31
Photography:                                                                                    Fax:++41 31 780 31 00
Corinne Conti Ambühl                                                                   e-mail:
Chus Díaz Bacchetta
Chus Graphic Design                                                                   

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