6:00 PM Seminar Begins

7:30 PM Reception

Hybrid Event:

Fordham University

McNally Amphitheater

140 West 62nd Street

New York, NY 10023

Free Registration!

For Virtual Attendees: Please select virtual instead of member type upon registration.

Abstract:

The collapse of Silicon Valley Bank (SVB) highlights the growing transformation of deposit-taking institutions into synthetic hedge funds, blending private equity-style banking with hedge fund-like trading strategies. This paper provides a conceptual framework to examine SVB’s hybrid model, which combined on-balance-sheet activities--such as venture capital credit lines and subscription facilities--with off-balance-sheet speculative strategies, including swap spread arbitrage.

These innovations positioned SVB as a synthetic hedge fund, leveraging financial engineering to enhance returns while operating within a regulatory framework designed for traditional banks. SVB’s failure underscores the tension between speculative risk-taking and the stability imperatives of deposit-taking institutions. The reliance on rigid financial models and misinterpreted macroeconomic signals led to premature hedging exits, exposing the bank to rising interest rates and liquidity stress.

The paper explores how the evolution of bank-driven synthetic hedge funds reshapes banking risk management, particularly through synthetic risk transfer (SRT), which allows institutions to redistribute risk while maintaining exposure. However, these strategies heighten systemic interconnectedness, amplifying liquidity mismatches and market fragility. Finally, the paper considers whether central banks must adapt as synthetic hedge funds of last resort, stabilizing a financial system increasingly shaped by hybrid institutions that blur the lines between banking and investment fund strategies.

Bio:

Elham Saeidinezhad is a Term Assistant Professor of Economics at Barnard College, Columbia University, where she teaches finance courses. She also teaches at NYU Stern.

Her research explores the intersection of market microstructure, industrial organization, and financial stability. She leads the Market Microstructure Project, an independent initiative surveying market dynamics to explore changes in financial market infrastructures and their implications for the broader financial system.

Previously, she was a Lecturer at UCLA’s Economics Department, teaching courses in Money and Banking and Monetary Economics. She also worked as a research economist in the International Finance and Macroeconomics Group at the Milken Institute, studying post-crisis structural shifts in capital markets. As a postdoctoral fellow at the Institute for New Economic Thinking (INET), she collaborated with Prof. Perry Mehrling on the Money View framework. She holds a Ph.D. in Empirical Macroeconomics from the University of Sheffield and a bachelor’s degree from Shiraz University.

Financial Engineer of the Year:

Robert Whaley

Award Dinner Information

Thursday, May 22, 2025

The Yale Club

New York City

6:30pm Cocktails 7:30pm Dinner

Corporate sponsorships including tables of ten are available

Individual seats are available for $600

For more information please contact the

IAQF office at 646-736-0705 or info@iaqf.org

About This Year's Award Recipient:

A frequent contributor to Wall Street Journal, New York Times, Marketplace and other news organizations on topics of market volatility, Bob Whaley is renowned as the “father of the fear index”-- the VIX, created for the CBOE in 1993. Professor Whaley has received a number of grants and awards including the 1989 Richard and Hinda Rosenthal Foundation Award for innovation in finance research, the 1993 Earl M. Combs, Jr. Award for contributions to the futures industry, a Chicago Board Options Exchange 40th Anniversary Award for contributions to listed options markets in 2013, the 2015 Joseph W. Sullivan Options Industry Achievement Award, and the 2015 William F. Sharpe Lifetime Achievement Award. Many of his research papers have received awards, including Graham and Dodd Scrolls for Excellence in Financial Writing from the Financial Analysts Journal in 1986 and 1987, the Bernstein Fabozzi/Jacobs Levy Award for Outstanding Article published in Journal of Portfolio Management during the volume year 1999-2000, the E. Yetton Award for Best Paper in Australian Journal of Management, 1997 for his work on program trading and futures option valuation, the CBOT Award for Best Paper on Futures at the Western Finance Association meetings in 1993 for his work on dual trading, the Canadian Securities Institute Award for Best Paper in Investments at the Northern Finance Association meetings in 1989 for his work on market volatility prediction, and an EOE Prize from the Institute for Quantitative Investment Research—Europe in 1995 for his work on deterministic volatility functions, and the Bernstein Fabozzi/Jacobs Levy Award for Outstanding Article published in Journal of Portfolio Management during the volume year 2008-2009.

Expertise. Professor Whaley is an established expert in derivative contract valuation and risk management, and market operation. He has been a consultant for many major investment houses, security (futures, option and stock) exchanges, governmental agencies, and accounting and law firms. Whaley developed the CBOE Market Volatility Index (i.e., the “VIX”) for the Chicago Board Options Exchange in 1993, the NASDAQ Market Volatility Index (i.e., the “VXN”) in 2000, and the BuyWrite Monthly Index (i.e., the “BXM”) in 2001. He also co-developed the NASDAQ OMX Alpha Indexes.

Publications. As an established expert in derivative contract valuation and risk management, and market operation, Professor Whaley has served as a consultant for many major investment houses and has published seven books, including the recent Derivatives: Markets, Valuation, and Risk Management by John Wiley & Sons, Inc. His current research interests focus on bitcoin products, volatility products, high-frequency trading and market volatility, market microstructure and relative performance options. His research has been published in the top academic and practitioner journals, and he is a frequent presenter at major conferences and seminars. Whaley holds a PhD and an MBA from the University of Toronto, and his BComm from University of Alberta.

The annual IAQF/Northfield FEOY Award, established in 1993, recognizes individual contributions to the advancement of quantitative finance. A nominating committee of approximately 60 people consisting of all the IAQF governing boards submits nominations, which are reviewed in a two-step process by a selection committee of 25 members. The selection committee includes the IAQF board of directors and senior fellows and was chaired by Dilip Madan IAQF senior fellow and 2021 FEOY award winner.

AI/ML in Finance – Shaping the Future of Financial Markets

Presented by IAQF and LSE DSI

June 24, 2025 | London

The International Association of Quantitative Finance (IAQF) and the Data Science Institute at the London School of Economics (LSE DSI) are delighted to co-host this exclusive event. Join us for an evening of insightful presentations and dynamic discussions on how artificial intelligence (AI) and machine learning (ML) are revolutionizing the financial markets.

Event description:

AI and ML are rapidly transforming the finance industry—from automating routine tasks to empowering complex decision-making. In this event, a series of short talks and a panel discussion will delve into the innovative applications and future trends at the intersection of finance and technology.

We look forward to welcoming you to an inspiring evening in London!

Why attend?

• Engage with thought leaders and experts in AI/ML and finance
• Network with industry practitioners, academics, and enthusiasts
• Gain insights into emerging trends shaping the future of financial markets

Confirmed speakers

• Giovanni Beliossi – Head of Investment Strategies at Axyon AI, UK
• Petter Kolm – Professor at NYU Courant, USA
• Hilary Till – Principal at Premia Research, USA

Registration

This is a free event, but registration is required. Walk-ins and onsite registration will not be possible. Please register here!

Location

LSE Shaw Library

6th Floor of the Old Building

London School of Economics and Political Science

Houghton St, London WC2A 2AE

Agenda

• 17:45 – Doors open
• 18:00 – 18:05: Welcome & introduction
• 18:05 – 19:20: Presentations & panel discussion
• 19:20 – 20:00: Reception

Map of the LSE Campus (Including the Old Building)