École Polytechnique launches a research chair with Capital Fund Management (CFM)
Press release - 18 February 2019
Eric Labaye, President of École Polytechnique, Jean-Philippe Bouchaud, Chairman and Head of Research of CFM, Jean-Bernard Lartigue, Executive Director of the École Polytechnique Foundation and Jean-Michel Beacco, Chairman of the Executive Board of the Institut Louis Bachelier “Fondation du Risque” (FDR), sign off, today, Monday, February 18, 2019, on the creation of an Econophysics & Complex Systems Chair, sponsored by Capital Fund Management SA (“CFM”), the quantitative investment management firm.
The new Chair, to which CFM will contribute around €2.5m over ten years, will involve applying scientific techniques to further understanding of fundamental problems in financial markets, including market crashes, risk models and impact costs. In addition, by taking a different approach to economic modelling, the Chair will challenge the academic orthodoxy, which underpins policymakers’ approach to managing economies. With the support of the École Polytechnique Foundation as well as the Institut Louis Bachelier “Fondation du Risque” (FDR), it will be led by Michael Benzaquen (Head of the Chair, Researcher at the Hydrodynamics Laboratory of École Polytechnique (LadHyX, CNRS/École Polytechnique) and Professor in the Department of Economics of École Polytechnique, supported by Jean-Philippe Bouchaud (Chairman & Head of Research at CFM).
This Chair is the latest example of CFM’s commitment to furthering understanding of global financial markets and economics for the benefit of investors and policymakers. CFM has extensive academic heritage and close links with several leading academic institutions, including École Polytechnique, Imperial College London and Ecole Normale Supérieure.
The team will consist of members from both École Polytechnique and CFM. Ph.D. students and postdoctoral researchers (from École Polytechnique) supervised by Michael Benzaquen will work alongside researchers at CFM combining the best of academia and business. Specific areas of focus will be on the mechanics of market impact and the triggers of market instability. In particular, the Chair will seek to explore the concept that market crashes are a result of inherent flaws in market construction as opposed to current academic theory, which places greater weight on external factors. In addition, considerable focus will be placed on discrediting the idea that an economy is always moving towards a predetermined equilibrium. Different thinking in this field has profound implications on Central Banks and monetary policy.
Jean-Philippe Bouchaud, Chairman and Head of Research at CFM said, “We are delighted to be partnering with École Polytechnique, a prestigious French institute with strong academic credentials. At CFM, we are committed to furthering the understanding of financial markets and economics for the benefit of investors and policymakers. This Chair, which further strengthens our longstanding relationship with École Polytechnique, is seeking to push the frontier of understanding around some of the most fundamental questions facing market participants. Despite their obvious flaws, many participants remain wedded to traditional theories and approaches to explaining markets and economics. We hope our work and findings encourages the adoption of new ways of thinking in these important areas”.
- About the Chair - www.econophysiX.com
- About Michael Benzaquen - http://www.off-ladhyx.polytechnique.fr/people/benzaquen/