Finance

Writing for Project Syndicate, Research Scientist Christian Catalini contributes to a Project Syndicate opinion piece makes the case for implementing cryptocurrency regulation that favors “builders over speculators.” Catalini and his co-authors write: “At the end of the day, policymakers in Washington must come together and draft new rules, rather than trying to squeeze crypto use cases into laws from nearly a century ago. And the industry, for its part, needs to tackle the many problems that traditional financial services and crypto leaders have long ignored.” They add: “The upside, much like in the early days of the internet, is a technology that can restore competition to sectors that haven’t seen it in decades.” 

Prof. Jeff Gore speaks with Caity Weaver of The New York Times about the future of the U.S. penny and his belief that the penny should be retired. “People think that because it exists and is used, it means that it’s useful,” Gore notes. “We’re taking something that is actually a valuable commodity, something that has actual value, and then we’re converting it into something that people just throw away.” 

Researchers at MIT are working toward training AI models “as subject-matter experts that ethically tailor financial advice to an individual’s circumstances,” reports Tanza Loudenback for Business Insider. “We think we’re about two or three years away before we can demonstrate a piece of software that by SEC regulatory guidelines will satisfy fiduciary duty,” says Prof. Andrew Lo. 

Prof. Kristin Forbes speaks with Bloomberg reporters Jonnelle Marte and Reade Pickert about potential Fed rate cuts. “The last few years have been a wake-up call,” Forbes said. “You want to do a framework review that is robust to many different economic circumstances.”

Research Scientist Eric Rosengren joins CNBC’s Squawk Box to discuss recession fears and Fed rate cuts, pointing out the largely healthy economy likely means no cuts in the short term. “We're just not seeing much in the way of underlying economic data that would indicate that financial markets are actually signaling a problem,” Rosengren says. “There’s no obvious financial instability issue here and the economy continues to be doing reasonably well.”

Prof. Christopher Palmer joins Infotrak host Chris Witting to discuss his recent study that found logistical assistance increases the likelihood that low-income families will move to neighborhoods that offer better economic opportunity. Palmer and colleagues asked “how come more people with vouchers aren’t availing themselves of the opportunity to move to better neighborhoods? That was a prime motivation for our study.”

Mario Ho '17, cofounded NIP Group, "an esports organization with a team of 125 pro gamers from China, Europe and Brazil," reports Zinnia Lee for Forbes. “NIP Group said it plans to expand into new markets such as Southeast Asia, North America, the Middle East, Japan and Korea,” explains Lee. “The company added that it would further expand its businesses in areas including esports education, digital collectibles and licensing of intellectual properties.”

More than 40% of employer matches go to the richest 20% of workers, according to a new report on retirement savings. Marketplace’s Caleigh Wells interviews finance experts, including Prof. Taha Choukhmane, who says white employees tend to benefit most, “whereas those who are single parents of kids, those who are Black or Hispanic, those who have lower-income parents tend to contribute less and make less in these matching contributions.”

An opinion piece by Katie Martin of the Financial Times explores how Prof. Emil Verner and colleagues have found that climate pledges made by banks and other financial institutions are not effective at reducing carbon emissions. “We find no evidence of reduced financed emissions through engagement,” the paper states. “We conclude that net zero commitments do not lead to meaningful changes in bank behavior.”

Writing for Forbes, Prof. Christian Catalini makes the case that when it comes to today’s digital infrastructure, from AI and robotics to financial services and digital marketplaces, “if the United States wants to continue to lead, it needs to create the right conditions for competition to thrive. Like in the early days of the internet, this starts with policymakers embracing and nurturing a novel architecture based on open protocols.” 

Axios reporter Steph Solis spotlights Kura, an MIT startup that is “developing a platform to help immigrants safely deliver money to loved ones back home.” Solis explains that: “Families worldwide rely on wire services like Western Union and Moneygram, but in some countries picking up money means waiting in long lines and exposing oneself to thieves.” Clifford Nau MBA ’22 and Stephanie Joseph, a Harvard alum, “wanted to build a safer alternative that would be available 24/7.”

Doug Ricket '01, MEng '02 co-founded PayJoy, a startup that aims to “provide a fair and responsible entry point for individuals in emerging markets to enter the modern financial system, build credit, achieve economic freedom, and access digital connectivity,” reports Mary Ann Azevedo for TechCrunch. “PayJoy is applying a buy now, pay-as-you-go model to the estimated 3 billion adults globally who don’t have credit by allowing them to purchase smartphones and pay weekly for a 3- to 12-month period. The phones themselves are used as collateral for the loan,” explains Azevedo.

Researchers from MIT and elsewhere explored the effectiveness of climate commitments made by banks to mitigate the effects of climate change, reports Nicole Goodkind for CNN. “Our results cast doubt on the efficacy of voluntary climate commitments for reducing financed emissions, whether through divestment or engagement,” the researchers note.

Researchers from MIT and elsewhere have found that climate pledges made by banks to reduce carbon emissions and finance energy transitions may not be as effective as previously thought, reports Eshe Nelson for The New York Times. “The researchers found that since 2018 the banks had reduced lending 20 percent to sectors they had targeted in their climate goals, such as oil and gas and transport,” explains Nelson. “That seems like progress, but the researchers argued it was not sufficient because the decline was the same for banks that had not made the same commitment.”

A new study by Prof. Joseph Weber and his colleagues “attempts to understand how financial statement auditors detect, resolve, and deal with the aftermath of material misstatements (MMs) in companies’ financial statements,” reports Joseph Brazel for Forbes.