N. Bulent Gultekin - Faculty Research in Knowledge@Wharton

Will Hopes for European Austerity Be Deflated?

Wed, 23 Jun 2010 15:52:02 EST

Following Greece's pledge to reduce its debts dramatically through a combination of government spending cuts and tax increases, others, including Spain, Germany, France -- and just this week, the U.K. -- began the march toward austerity. While many question whether a country like Greece can make good on its promises without resorting to debt restructuring, the bigger question is whether the austerity measures will actually work.

Whither the Euro: Safe Harbor or Fractured Fate?

Wed, 23 Jun 2010 15:52:02 EST

With the financial crisis in the United States seemingly under control, Europe went into a panic of its own this spring, substituting the specter of defaults on sovereign debt for the American penchant for defaults on home-mortgage debt. A stabilization package valued at nearly $1 trillion was put into place in Europe, calming markets, at least for the moment. But where does the euro wind up amid all this tumult? One view is that the euro is safe, bolstered by a sense that it is too important to fail. But others say it is heading for a fall.

For PE Firms, Liquidity Remains the Key Issue

Wed, 12 Jan 2011 13:15:52 EST

With easy access to financing, large leveraged buyout firms grew to massive sizes during the private equity (PE) boom between 2005 and 2008, often with shares in deals valued in the billions. Now, following the global economic meltdown, speakers at the recent Wharton Private Equity and Venture Capital Conference, "A New Dawn: Investing in the Post-Crisis World," explored how the industry is faring. One speaker noted that, pre-crisis, there was a moment in time when "our industry forgot that we have to pay every penny of that debt." Another said PE firms are focusing on providing added resources to support their portfolio companies in today's suppressed markets. One upside of the boom years: Much of the PE financing in place has few or no covenants, which gives companies some breathing room.

Could Dubai World's Debt Default Spark a Crisis in the Middle East and Beyond?

Wed, 09 Dec 2009 17:18:52 EST

When Dubai World announced late in November that it wanted a six-month delay on payments on $26 billion in debt, the financial markets were thrown for a loop. The Dow Jones Industrial Average fell 155 points, or 1.5%, European stocks dropped and oil prices plunged. The Dubai story is still unfolding -- the emirate's stock exchange fell for the third consecutive day on December 9 after Moody's downgraded the ratings of six government-linked companies. Though some investors believe Dubai does not provoke as much fear as other corporate collapses over the past couple of years, Wharton professors point out that the world economy could face serious problems if similar financial troubles spread to European economies such as Greece.

Time for Transparency: What Will It Take to Improve Corporate Governance in the Middle East?

Wed, 11 Mar 2009 16:25:39 EST

As the financial crisis roils the world economy, scandals are surfacing in various parts of the world. In the Middle East, the latest scam to hit the headlines involves Nabil al-Boushi, an Egyptian broker who is accused of swindling investors in Dubai and has been termed the "Egyptian Madoff." As is usual in such circumstances, demands are being heard for improving corporate governance and financial regulation in the Middle East. This, however, is an enormous task. A 2008 survey found that barely 3% of publicly listed companies and banks in the region have good corporate governance practices. Can this situation be turned around? Experts from Wharton and elsewhere offer their suggestions.

Worry in the West as Eastern and Central European Economies Head South

Wed, 04 Mar 2009 14:25:43 EST

The world financial crisis is unraveling the gains made by many Central and Eastern European economies during their post-Cold War resurgence. With the region no longer isolated, an economic collapse could reverberate in the West, as Central and Eastern European borrowers default on an enormous volume of loans that Western banks were all too eager to grant just a few years ago.

Do the Answers to Our Current Financial Woes Lie in the Past?

Wed, 01 Oct 2008 19:25:39 EST

Bad debt. Frozen credit. Stock market panic. Popular outrage. Political paralysis. The financial crisis that has dominated September's headlines may feel unprecedented to many Americans. But it feels altogether familiar to scholars who have examined the economies of other nations around the world that have undergone recent banking crises. During a panel discussion held the day after the Dow Jones Industrial Average plunged a record 777 points, Wharton and University of Pennsylvania faculty offered their views on what the United States can learn from the past tribulations of markets as diverse as Japan, Mexico and Turkey.

Building a Modern Economy: How the 'Dubai CEO's' Big Bet Is Paying Off, for Now

Wed, 21 Mar 2007 15:21:30 EST

The announcement that Halliburton, the Houston, Tex.-based oil services company, was moving its headquarters to Dubai may have surprised many Americans. But for people in Dubai, it simply ratified decades of hard work. Led by the billionaire known today as "Dubai's CEO," Sheikh Mohammed bin Rashid Al Maktoum, Dubai's ruling family has invested heavily in the infrastructure of a modern economy. So far their efforts have been impressive, although observers warn of a possible real estate bubble, among other concerns.

Are Emerging Markets Striking Back, or Out? The View from Investors

Thu, 22 Jun 2006 13:51:58 EST

At the start of the Wharton Global Alumni Forum's June 9 panel on investing in emerging markets, Assaad Jabre, acting executive vice president of the International Finance Corp., offered a succinct view of the future: "Emerging markets will be the winner of the globalization process," he stated. "A few years ago, many people were saying that developing countries would be the victims. We know that won't be the case. China, India, Turkey and others are success stories." One major reason for this, he said, "is the growth of the private sector in those countries." Jabre was joined on the panel by Harry Alverson, managing director of The Carlyle Group, who spoke from the perspective of an investor in emerging markets, Tezcan Yaramanci, chairman of Bank Europa Turkey; Yavuz Canevi, chairman of TEB-BNP, and Yosef Shiran, CEO of Israel-based Tefron.

The Long and Winding Road to Privatization in China

Wed, 10 May 2006 17:29:08 EST

China's sweeping economic reforms, which have lifted the country to a starring role in the global economy in only a quarter-century, are marked by a more gradual transition from state control to private ownership of firms than in other countries that have also made the transition, according to Wharton faculty. Indeed, privatization in China has come slowly as government officials weighed the prospect of massive layoffs necessary to restructure bloated state-owned enterprises, known as SOEs. Privatization was also met with resistance from influential company managers, many of them Communist party officials. Despite these obstacles, however, a vibrant, entrepreneurial private sector has managed to survive alongside state-controlled firms.

Economic Trends in the Middle East -- and High Oil Prices -- Suggest Fertile Ground for Growth

Wed, 01 Jun 2005 16:46:12 EST

New investment and business opportunities in the Middle East are coinciding with a number of economic trends in that region, ranging from a booming stock market to an increased share in world trade to greater progress in privatization and liberalization. Rising oil prices in particular, which reached a peak level of $55 per barrel in 2004, have brought prosperity to all oil exporting economies and are encouraging regional governments to diversify their oil-based economies into non-oil areas, such as construction and tourism. These changes, along with political, social and economic reforms, were among the topics discussed during the first Wharton Global Family Alliance Conference held in March in Dubai.

Islamic Banking Comes of Age - But What's Next?

Wed, 10 Mar 2004 16:03:36 EST

Islamic banking has come a long way in the last 25 years. It has gone from almost nothing to an industry with assets of hundreds of billions of dollars and half of the consumer market and 10% of the assets under management in countries such as Malaysia. Yet, it has still not emerged as a truly revolutionary force in the financial world. Whether it can make that leap is a question for every Islamic banker.

The Future of the Euro-Dollar Relationship Depends a Lot on the U.S.

Wed, 30 Jan 2002 00:00:00 EST

The euro, according to international finance experts at Wharton, is doing well. Completing the final stage of its three-year launch on January 1, the euro could, in fact, become an alternative to the dollar as a global reserve currency, or even provide a place of refuge if mounting U.S. debt leads to a weaker dollar. A lot depends on the U.S. economy.