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Quantitative Easing and its impact on the real economy and financial markets

UCLan Cyprus  
School of Business & Management  
Research Series  
Thursday 21st November 2013, 13:00 – 14:00  Room CY007  
Presenter: George Theocharides, Associate Professor of Finance, The Cyprus International Institute of Management  
Title: “Quantitative Easing and its impact on the real economy and financial markets”    

Abstract: Since the global financial crisis, Central Banks around the world have used Quantitative Easing (QE) to mitigate somewhat the adverse effects of the crisis, and prevent money supply from falling. Quantitative Easing relates to the purchase of assets of long-maturity (bonds) from the market by Central Banks, thus increasing the prices of those assets and lowering their yields. Right now, the U.S. Fed is in the third round of QE. The main question here is, to what extent the QE programmes mitigated the adverse effects of the financial crisis, and how do they impacted the prices/yields of intermediate/long-term bonds? Can Europe and the ECB follow the same approach in order to tackle the Eurozone debt crisis? What could be the impact of such act on Cyprus government bonds? In my discussion, I will draw from my current research where I examine the deviations of the 10-year U.S. T-note prices from their fundamental values, investigating what drives those deviations, and in the process looking at how the recent QE programmes impacted these markets.    

Biography: George Theocharides is an Associate Professor of Finance at Cyprus International Institute of Management (CIIM) since September 2010. He is also the Director of the MSc in Finance & Banking. Before joining CIIM he spent almost four years as an Assistant Professor of Finance at the Graduate School of Business at Sungkyunkwan University in Seoul, Korea. Prior to that, he served as an International Faculty Fellow at the Massachusetts Institute of Technology’s Sloan School of Management between August and December 2006. He holds a B. Eng. (Hons) degree in Electrical Engineering and Electronics from University of Manchester Institute of Science and Technology (U.M.I.S.T.), an M.B.A. degree (in Marketing and Venture Management) from the University of San Diego, as well as a Ph.D. in Finance from the University of Arizona. His research and teaching interests are in the field of fixed-income markets, investments, international finance, and derivatives.