At noon on November 25th, the seventh session of the "Noon Sunshine-Young Scholars Forum" sponsored by the School of Finance was held as scheduled in the school's 116 classroom. The theme of this forum is "Non-financial Assets of Financial Companies". Yu Shi (PhD in finance from the Anderson School of Business at UCLA), newly recruited assistant professor of the School of Finance, shared her working paper.Today’s forum invited Kai Li, the senior associate professor of finance at Peking University HSBC Business School and PhD in economics at Duke University in the United States, to comment on the report. Xu Han (Party Secretary of the School of Finance) and Lanbiao Liu (the deputy dean of the School of Finance) attended the event.

The assistant professor Yu Shi presented her latest research “The Nonfinancial Value of Financial Firms”. This paper discusses the influence of the value of non-financial assets on the market value of financial companies.Taking insurance companies as an example, Yu Shi divided the assets of financial companies into financial assets and non-financial assets, and demonstrated the differences in risk characteristics of these two assets with empirical methods.Although non-financial assets account for only 40% of the total assets of financial companies, their volatility can explain 81% of the fluctuation in the time series and 100% of the fluctuation in the cross section of the market value of financial companies.The existing policies to prevent the bankruptcy of financial companies mostly focus on controlling the risk of their financial assets, while the volatility of non-financial assets may also lead to the bankruptcy of financial companies.

After the wonderful presentation by assistant professor Yu Shi, Professor Kai Li made comments: Yu Shi put forward her own in-depth evaluation and opinions on the potential measurement error of "residual", the capital flow of enterprises, and another interpretation of this puzzle.Finally, he highly appraised the research results of Yu Shi as an important contribution to the literature on financial intermediation.

In the course of this academic activity, Yu Shi’s rigorous logic and witty language ignited the academic atmosphere, and she gave wonderful responses and discussions to the problems of on-site teachers and students.In the end, the lecture ended successfully in a warm applause.

The content of this lecture is simple, the language is vivid, and the academic atmosphere is strong. Teachers and students attending the lecture have gained a lot and expressed their expectations for the next series of lectures.

In the coming weeks, the School of Finance will also continue to carry out its "Noon Sunshine" lecture series,which will bring new academic ideas pour into the college like the warm sun in winter, providing opportunities for thinking collision and academic discussion between teachers and students, and building a platform for academic exchange and cooperation.

Copywriter: Xinxin Liang, Xiaomeng Wang

Photography: Chunxiao Wu, Xianglong Liu, Wenyu Yang