Department of Finance

As the Department of Finance prepared to celebrate its fortieth anniversary this year, it also continued to grow. While the department continues to share undergraduate finance majors with the College of Liberal Arts & Sciences, the lion's portion — 700 students, out of a total of 774 — belongs to CBA.

 

"UNDERGRADUATE ENROLLMENT HAS REALLY BALLOONED," observes department chair Morgan Lynge. It has risen from 657 in 1995-96 to 774 in 1997-98 — an 18 percent increase.

As for MBA students, Lynge notes that 40 percent choose a finance track. "It looks like the interest in finance is growing both at the undergraduate and MBA levels," he concludes. "It puts a heavier teaching burden on us, though — we don't have any additional faculty to shoulder the load."

Meanwhile the Ph.D. program is following a reverse but desirable trend, as the number of doctoral students continues to decline. For 1997-98 the number of students stands at seventeen — down by two from last year, and by four from 1995-96. "This is a deliberate paring down due to market conditions," says Lynge. "For twenty years there was a demand to fill academic positions. But the demand began drying up in the `90s." Since 1992 at least fifteen Ph.D. grads in finance have obtained academic posts, in institutions ranging from Texas A&M, University of Iowa, and Washington State University to Cheju National University (Korea), City Polytechnic of Hong Kong, and
the University of Helsinki (Finland).

THE C.F.A. REVIEW COURSE, TAUGHT AS A STUDY GROUP on Friday afternoons during the spring semester, drew an enrollment of thirty-two students — up by twenty-one from the spring of '97. Members of the group include graduating seniors, MBA students, and business executives, all meeting to study for the grueling exam, which is the first step toward certification as a Chartered Financial Analyst (C.F.A.).


CHARLES KAHN WAS NAMED TO THE BAILEY MEMORIAL CHAIR IN FINANCE in January 1998. Kahn, who has been on the CBA faculty since 1988, has also held the position of IBE Professor of Economics and serves as co-director of the Office for Banking Research. He has a Ph.D. in economics and a B.A. in applied mathematics from Harvard, as well as an M.A. in economics from Cambridge University. He is a specialist in the economics of information and uncertainty, with research focusing on the applications of the theory of contracts and incentives to banking and financial intermediation.

The chair was established in 1957 as a bequest of Fred S. Bailey, whose wish was to "encourage within the University of Illinois, distinguished men to provide sound American instruction in the principles of economics and free enterprise to the youth attending such institution." Bailey was a UIUC alumnus who served as president of Champaign National Bank from October 1925 until April 1955, when he died at the age of eighty-four. The bank was founded in 1882 by his father and grandfather.


THE MASTER OF SCIENCE IN FINANCE PROGRAM HAS MORE THAN DOUBLED over the past two years, from seventeen students in 1995-96 to thirty-nine students for 1997-98. But, with 75 percent of the program's enrollment filled by Asian students, Lynge regretfully anticipates declining numbers in the entering class this summer, owing to the financial turmoil in the Far East. However, as of this writing, applications are up. The true story will not be known until students arrive in the fall to enroll.


In addition to scholarly publications, several finance faculty have been cited in the public media.

George Kvirikashvili, Muskie Scholar

Like a field that lay fallow over the long Soviet winter, Georgia is ready to thrive. And George Kvirikashvili is getting ready to thrive along with his native country. He has come to UIUC as a Muskie scholar and is working toward an M.S. with a specialization in international finance.
"When I first entered the Illini Union, I was very impressed," says the young banker and business student, breaking for coffee between classes. He reminisces over why he chose U of I instead of UC Davis, where he had also been accepted. "This university is very old, and I think it is one of the best. UC Davis I liked, but it's a new university. You can feel that the U of I comes from the nineteenth century. It's very impressive. I like that."

Since he arrived last summer, life in Chambana has been good, if a bit lonely. Waiting back in Tblisi are his wife, Maia, and three children — daughters Anna, 7, and Nino, 4, and his 2-year-old son Gemo. "I spent the Christmas holiday with them. One year will be well enough for me. It is hard," he admits. "But I'm doing it for them. And my wife is very supportive."

Meanwhile, the American lifestyle continues to amaze. "Americans never give up," he grins. "They're fighters. When I see the old Westerns, I can understand their character. They are good friends."

"This is a good place — with good times," he continues. "More good times could affect my studies." Fortunately, the work is all-absorbing. "I like the quality of the study — especially in finance and accounting. Statistics has been extremely good. My adviser, Professor Cannaday, has been very helpful. He will sit down with me for an hour and discuss any kind of problem I might be having — not just in school, but — how to buy something. Or how to send something back to my family."

"I have made friends from all over the world — Southeast Asia, Latin America," he observes. "When I have to do business I will be able to pick up the phone and call them. Most of the people in my program already have a lot of working experience." He expects such connections will prove valuable when he returns to the Export-Import Bank in Tblisi. Eximbank, as it is known, is the largest bank in Georgia. It was here that Kvirikashvili had risen to the position of vice president, when he got the go-ahead for his year of study.  "It is still very hard in my country. Since the breakdown of the Soviet Union, there have been a lot of changes," he explains of Georgia. "We had a civil war three years ago. A lot of economic changes are going on, with a lot of agencies involved — including the IMF and The World Bank."

"So, there is stabilization. You can feel it."

Kvirikashvili explains that, in the past year, Georgia experienced the largest growth rate of all former USSR countries. And with an enormous oil pipeline planned between the Caspian and Black Seas, more growth is on tap. "The biggest part of the pipeline will pass through Georgia and a lot of foreign oil companies are interested," he observes, adding: "To build the pipeline will require a financial infrastructure. That means strong local banks."

"And they will be looking for people who have had an education in the U.S."

He concludes: "There is not anything here I haven't liked — except the weather."