Richard Bookstaber

Richard Bookstaber (born 1950) is the author of A Demon Of Our Own Design, a book highlighting the fragility of the financial system that occurs from tight coupling and complexity. The book is noted for its foreshadowing of the financial crisis of 2007–08. He is also the author of The End of Theory, which critiques the applicability of economics in dealing with financial crises, and proposes an alternative paradigm using agent-based models.

Richard Michael Bookstaber
Born1950 (age 72–73)
Newark, NJ
Alma materMassachusetts Institute of Technology
Brigham Young University[1]
AwardsGraham and Dodd Scroll[2]
Roger F. Murray Prize[3]
Scientific career
FieldsFinance
Websiterick.bookstaber.com

Academic career

Bookstaber received a B.A. in Economics from Brigham Young University and a Ph.D. from the Massachusetts Institute of Technology.

He held academic positions at Boston University, Brigham Young University, and the Hebrew University of Jerusalem, the last as a Fulbright Scholar. His research focused on option pricing theory, and he wrote an early book in the field.[4]

He has also authored scores of articles on finance topics ranging from option theory to risk management.[5]

Industry career

Bookstaber joined Morgan Stanley in 1984, where he held positions in research and proprietary trading, and was appointed to be the firm's first market risk manager. In 1994 he moved to Salomon Brothers where he was the Managing Director in charge of firmwide risk. Following the purchase of Salomon Brothers by Citigroup he took on risk manager roles in a number of hedge funds, including Moore Capital Management and Bridgewater Associates; and also founded the FrontPoint Partners Quantitative Equities Fund.[6] He also worked at Ziff Brothers Investments doing both risk management and running a quantitative equity portfolio.

Bookstaber is the co-founder and head of risk at Fabric, which provides risk management applications for the wealth management and asset owner community.[7]

Public sector career

Following the publication of A Demon Of Our Own Design, Bookstaber testified a number of times to Congress on issues related to the financial crisis on topics including derivatives,[8] hedge funds,[9] systemic risk,[10] and risk management.[11]

Beginning in 2009 he took on various number of roles in the U.S. financial regulatory system. Bookstaber worked at the U.S. Securities and Exchange Commission during formulation of the Volcker Rule.[12]

From 2010-2013 he worked at the United States Department of the Treasury as a Senior Policy Advisory to the Financial Stability Oversight Council, and Research Principal at the Office of Financial Research.[13] His research focused on applying agent-based models to assess systemic financial vulnerabilities.[14]

He subsequently served as the Chief Risk Officer in University of California's Office of the CIO, overseeing its $180 billion investment portfolio.

Notes
  1. "Blogger Profile". Retrieved 17 January 2014.
  2. "All Past Graham and Dodd Award Winners". Financial Analysts Journal. Archived from the original on 17 January 2014. Retrieved 17 January 2014.
  3. "Roger F. Murray Prize Winners". Retrieved 17 January 2014.
  4. Bookstaber, Richard (1981). Option Pricing and Strategies in Investing. Addison Wesley Longman Publishing Co. ISBN 9780201001235.
  5. Wiley (2009-04-22). "Author Information". Wiley. Retrieved 2009-04-22.
  6. Bookstaber, Richard (2007). A Demon Of Our Own Design. United States: John Wiley & Sons. ISBN 978-0-471-22727-4.
  7. "Transcript: Richard Bookstaber on the big structural risk in the market right now". 6 December 2021. Retrieved 10 January 2022.
  8. Testimony of Richard Bookstaber (4 June 2009), Submitted to the Senate of the United States, Committee on Agriculture, Nutrition, and Forestry; For the Hearing: Regulatory Reform and the Derivatives Markets
  9. Testimony of Richard Bookstaber (15 July 2009), Submitted to the Senate of the United States, Committee on Banking, Housing, and Urban Affairs Subcommittee on Securities, Insurance, and Investment; For the Hearing: Regulating Hedge Funds and Other Private Investment Pools
  10. Testimony of Richard Bookstaber (19 June 2008), Submitted to the Senate of the United States, Senate Banking, Housing and Urban Affairs Subcommittee on Securities, Insurance and Investment; For the Hearing: Risk Management and Its Implications for Systematic Risk
  11. Testimony of Richard Bookstaber (10 September 2009), Submitted to the U. S. House of Representatives, Committee on Science and Technology Subcommittee on Investigations and Oversight; For the Hearing: The Risks of Financial Modeling: VaR and the Economic Meltdown
  12. Goldfarb, Zachary (15 June 2010). "SEC is hiring more experts to assess complex financial systems". Washington Post. Retrieved 17 January 2014.
  13. Norris, Floyd (10 January 2013). "Clouds Seen in Regulators' Crystal Ball for Banks". New York Times. Retrieved 17 January 2014.
  14. Bookstaber, Richard (21 December 2012). Using Agent-Based Models for Analyzing Threats to Financial Stability. Office of Financial Research Working Paper #0003
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