The Great Recession showed the need for greater knowledge of financial markets among central bank workers, many of whom come from an economics rather than finance background, said Dr Simon Taylor, director and founder of the master of finance course at Cambridge Judge Business School.
“We’ve seen a new interest among central banks in recruiting students with a finance background,” said Simon.
“When we launched the MFin right in the middle of the financial crisis in 2008, we were mainly thinking of the benefits to the private sector. But over the years we’ve seen how valuable the degree is to people in the world of finance policy, including central banks.”
Many central banks, including the Bank of England, have taken on additional financial regulatory responsibilities since the crisis. Critics say central banks could have done more to stem the build-up of risky products that contributed to the financial meltdown.
A need for central bankers with financial training is emerging, according to Paul Tucker, former deputy governor of the Bank of England. “The growing importance and complexity of the financial system means that it is useful for central bankers to study finance,” said Paul, a member of the advisory board for Cambridge Judge.
“Practitioners, policymakers and above all central bankers need to know the foundations of finance theory and how finance works in the real world,” he said.
The program has seen students diverse from traditional careers at financial services firms.
Cambridge’s MFin has graduated students into central banks in the UK, China, South Korea and Malaysia, among other countries. Graduates also go on to work at the IMF, the World Bank and the African Development Bank.
While finance students face an ever-growing choice of programs including the MBA which still places many students into the world’s leading banks, the crisis has driven home the need for better training after a culture of risk-taking which helped precipitate the crisis. The answer for many schools was to launch MFins.
A large number of other leading business schools have launched specialist finance master’s degrees to prepare students for an increasingly competitive jobs market. INSEAD launched a master in finance program in 2013 for professionals with four to six years' experience, while HEC Paris launched a new dual degree international finance program earlier this year.
Demand for such programs has been insatiable. MIT Sloan’s master of finance course received 1,600 applications for 120 places, while of the 1,300 students enrolled in master’s programs at Cass Business School, 1,000 are taking courses in an aspect of finance.
Central banks may be attractive to business school students. They present an alternative to financial services groups which face mounting regulatory scrutiny and curbs on pay and bonuses, while banks’ reputations have been damaged.
The Cambridge Judge MFin covers financial markets, institutions and derivatives markets.
Students can specialise by taking electives in regulation, international finance and macroeconomics, which are directly relevant to the macroprudential work of central bankers, policy banks and regulators, the school says.
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