Douglas Diamond of University of Chicago wins Nobel in economics.
Congratulations
The University of Chicago’s Douglas Diamond has spent his academic career researching short- and long-term financial assets. All the while, his work was building its own value, for him and society.
Monday, he got the news that extremely deferred compensation was headed his way. Diamond, finance professor at the University of Chicago Booth School of Business, won the Nobel Prize for economic sciences, recognition for research into the banking system that goes back to the 1980s.
It’s been a career of applying theory to the real world of lending, addressing when banks need to take risks and why they might need help during a crisis. They can be well-capitalized but still susceptible to “the fear of fear itself,” Diamond said.
His papers have influenced top policymakers, including former Federal Reserve Chairman Ben Bernanke, also awarded a Nobel on Monday for parallel research into the banking system. Bernanke is now with the Brookings Institution.
Diamond also shares the Nobel with Philip Dybvig of Washington University of St. Louis for papers they co-authored. The three men divide a financial award of about $900,000.
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