Workshop Series: Jerry Parwarda
Using the hedge fund industry as our laboratory, we examine whether bank bailout programs initiated in seven countries during the 2007-2009 global financial crisis reduced contagion risk in the financial system. We test for the likely channel of achieving any such benefits. Reduced fund liquidation probabilities followed bailouts of financial firms offering prime brokerage, custodial and investment advisory services to hedge funds in the short term. However, bailouts did not lead to increased capital levels in bank-related hedge funds. Collectively, our evidence suggests that bailouts helped stem the propagation of contagion through information channels rather than directly through counterparty funding.
Jerry Parwada is the Associate Professor and Head of Banking and Finance in the Australian School of Business at the University of New South Wales, Sydney, Australia. Jerry attended St. Ignatius College in Zimbabwe. His undergraduate degree in finance is from the National University of Science and Technology and he has a PhD in finance from Edith Cowan University in Australia, where he also took his MBA. Jerry's research specializes in funds management and financial markets. His works have been published in several international finance journals. He is an active consultant to industry on issues relating to managed funds and valuation and is a regular speaker at local and international finance conferences.