Press Release

Monday, January 9, 2012

Allan Friedman
Phone: (773)702-9232
Email: allan.friedman@ChicagoBooth.edu

      

Douglas Diamond wins prestigious Morgan Stanley-American Finance Association Award for Excellence in Finance

Douglas W. Diamond, a professor at the University of Chicago Booth School of Business who studies financial intermediaries, financial crises, and liquidity, has received the 2012 Morgan Stanley-American Finance Association Award for Excellence in Finance.

Diamond, the Merton H. Miller Distinguished Service Professor of Finance and a Richard N. Rosett Faculty Fellow, will donate $175,000 of the $200,000 cash prize to the Chicago Booth Fama Miller Center for Research in Finance. The remaining $25,000 will be donated to the Foundation for the Advancement of Research in Financial Economics.

The Morgan Stanley-AFA award was created in 2008 and is given once every two years in recognition of an individual’s career achievements and leadership in financial economics research. The two previous winners also came from Chicago Booth. Eugene Fama, the Robert R. McCormick Distinguished Service Professor of Finance, won in 2008 and Michael Jensen, one of Fama’s Ph.D. students, won in 2010. Jensen received his Booth degree in 1968 and is a professor emeritus at Harvard University.

Diamond received the award January 7, 2012, in Chicago at the annual meeting of the American Finance Association. “Doug Diamond is widely known for his pioneering work in finance,” said Sunil Kumar, Chicago Booth dean. “His research is insightful, has broad impact and has changed our way of thinking about some key aspects of the financial system,” said Kumar, who also is the George Pratt Shultz Professor of Operations Management.

“Doug Diamond has been at the center of the development of the modern theory of banking and financial intermediation,” said John Cochrane, head of the American Finance Association award selection committee and the AQR Capital Management Distinguished Service Professor of Finance at Booth. “He has brought careful bottom up economic analysis to all the issues that are at the center of our current – and historical – financial problems. These range from runs, liquidity, incentives, and commitment to capital structure choices. His work literally founded the field,” Cochrane said.

Diamond joined the Chicago Booth faculty in 1979 as he was completing his Ph.D. in economics at Yale. His research has appeared in the Journal of Financial Economics, the Journal of Finance, the Review of Economic Studies, the American Economic Review, the Journal of Political Economy, The Quarterly Journal of Economics and other academic journals.

His most influential early research includes “Financial Intermediation and Delegated Monitoring,” in the Review of Economic Studies, July 1984, and “Bank Runs, Deposit Insurance, and Liquidity,” in the Journal of Political Economy, June 1983, authored with Philip H. Dybvig.

Diamond often collaborates on research on financial crises with Raghuram Rajan, Eric J. Gleacher Distinguished Service Professor of Finance at Booth. They recently published “Fear of Fire Sales, Illiquidity Seeking, and Credit Freezes,” in the Quarterly Journal of Economics, May 2011.

During the current academic quarter Diamond is teaching “Theory of Financial Decisions II,” which is a Ph.D. course that some M.B.A. students also take. Later this school year he is scheduled to teach “Financial Markets and Institutions,” an advanced M.B.A. course in corporate finance, and “Theory of Financial Decisions III.”

In addition to his roles as a researcher and professor, Diamond is a visiting scholar at the Federal Reserve Bank of Richmond, a position he has held since 1990, and a board member of the Chicago Booth Center for Research in Security Prices. He is also a research associate at the National Bureau of Economic Research and has served as an academic consultant to the Federal Reserve Board.

Diamond is a former president of the American Finance Association and the Western Finance Association. He is also a fellow of the Econometric Society, the American Academy of Arts and Sciences, and the American Finance Association.

The University of Chicago Booth School of Business is one of the leading business schools in the world. The school’s faculty includes many renowned scholars and its graduates include many business leaders across the U.S. and worldwide.

The Chicago Approach to Management Education is distinguished by how it leverages fundamental knowledge, its rigor, and its practical application to business challenges. Chicago Booth offers a full-time M.B.A. program, an evening M.B.A. program, a weekend M.B.A. program and an executive M.B.A. program in Chicago, London and Singapore. The school also offers a Ph.D. program, open enrollment executive education and custom corporate education.

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