It can be taken as a given that the best and brightest are in academia (myself excluded), and perhaps that academia attracts experts who are more prepared to take the high moral ground, or are what Lobel-Goldstein charmingly refer to as 'idealistic'. Financial reward is not necessarily their primary career motivation. In my initial reaction, at issue here is the independence of academia.
Academia would probably be more 'independent' than say a credit rating agency (who are paid by the corporates for their reviews, and the financial 'meltdown' possibly exposed their inadequacies in the prediction of financial distress) ; or a private audit/insolvency firm (who always approach such projects as "which of the interested parties do we have relations with and need to (a) get onside with and/or (b) get further work from). The government or journalists often get it right, but are also operating in difficult circumstances. The use of academia could be a new prong in the attack on corporate fraud, financial distress, seniors losing their pensions and workers losing their jobs.
Such a role doesn't belong in the private sector. In a former life with a corporate I was tasked with setting up a model that could identify listed equities that were 'vulnerable' (a polite way of saying 'high risk' or 'near financial distress'). This model used variants from both media, company reports, credit reports and 'word of mouth' - basically anything. The aim was to alert the company the model identified that if someone like me (ie not too bright) could spot it, so could financial analysts. And then my employer would get work going into the company (on behalf of creditors or the company) and sussing it all out. But then I had to move onto other projects and the model became a maintenance and monitoring function. But at the time I thought it would be far better if such a role were handled by academics who weren't interested in getting $$ work out of it and would have more time (and mathematical nouse) to develop it. Academics could also get their thrills working through the complex layers of financials and press that 'vulnerable' companies throw up to mask their true positions.
But on the other hand, academia in Australia has been privatised to the point that the work of academics is sometimes sponsored by the corporate world.... and hence the potential opening for some risk to the independence of academics.
But I still reckon they're the best of a bad bunch and definitely believe there is a role for academics in the monitoring of corporate risk. Only issue then is, if they identify it, what happens next? Would it go to ASIC? If so, should such a 'financial investigations cooperative research centre' of academics by federally funded via ASIC for such a proposal?
Note: I found the Lobel-Goldstein idea while looking at another idea on the excellent blog of John Mecklin. That idea concerned data mining by journalists - and data mining could be used by mathematician academics, actuaries, accountants, economics etc to identify financial distress and risk.
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