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Capital Markets Finance Library

Finance Library

The canon of finance literature is vast, with hundreds more publications emerging every year. This section distills the main lessons from most influential finance books both past and present, from the cornerstones to the most popular reads. Each summary includes a concise overview and analysis of the book's most distinctive contributions to management thinking and practice, along with bibliographic information for the featured title and related works by the author.

  • A Demon of Our Own Design
    Richard Bookstaber (2007)
    A timely book on the risks underpinning the hedge fund industry, and the markets in general. Bookstaber was involved in the design of some of the complex options and derivatives described in the book, which are contributing to the market downturn. Discusses why, although there is greater market sophistication, improved technology, and improved oversight and regulation, the markets are becoming more risky all the time.
  • A Non-Random Walk Down Wall Street
    Andrew W. Lo and A. Craig MacKinlay (1999)
  • Advances in Behavioral Finance
    Richard H. Thaler (ed) (1993)
    A team of experts from leading business schools present key papers on this increasingly important topic in finance. Considered a major text in the development of theory, containing the latest research on how behavior and psychology affect the financial markets. Assesses how individual behavior affects a number of areas, including speculative prices, and when it is best to sell both successful and unsuccessful stocks.
  • An Introduction to Islamic Finance Theory and Practice
    Zamir Iqbal and Abbas Mirakhor (2007)
    Two of the best-known authorities in Islamic economics, finance, and banking provide an insightful and comprehensive introduction to Islamic financial principles and practice. Offers a concise background on the development of Islamic finance, and a practical overview of the main products and processes. Reflects on the progress that Islamic financial markets have made over the last few years, which has helped create an appetite for the Western...
  • Banker to the Poor: The Story of the Grameen Bank
    Muhammad Yunus and Alan Jolis (1998)
    Tells the story of how Muhammad Yunus began to assist the poor in Bangladesh with a US$27 loan and ended with the Nobel Peace Prize. Shows how the concept of microcredit can help the most needy, those trapped in a cycle of poverty, and without access to traditional banking. Explains how the Grameen Bank has grown into a US$2.5 billion enterprise, and microfinancing has spread to over 50 countries, based on the principle of lending to the poorest...
  • Confusión de Confusiones
    Joseph de la Vega (1688)
    This is the oldest book ever written about the stock exchange business, and it made de la Vega famous for his insights and stories about speculation in the 17th century. Considered a classic, as the type of trading intricacies and market manipulations of the time are still with us today. Presents four rules of speculation that are still relevant: never advise anyone to buy or sell shares; accept both profits and losses; profits do not last; you...
  • Extraordinary Popular Delusions and the Madness of Crowds
    Charles Mackay (1841)
    Examines the psychology of crowds and mass mania throughout history, including many of the classic scams, financial bubbles, mass hysteria, and deceptions that have characterized the business world and beyond. At once a gripping thriller and fascinating historical document, the book discusses the underlying processes that lead markets into boom-and-bust cycles that still occur today. Considers why people form into irrational groups when they...
  • FIASCO: The Inside Story of a Wall Street Trader
    Frank Partnoy (1997)
    This is an insider’s account of working as a derivatives salesman at Morgan Stanley in the 1990s. It was the first book to examine the derivatives trading industry in detail, and it warned of the dangers of buying and selling products so complex that many of the traders did not understand them. Tells the story behind many of the best-known derivatives fiascos, including Orange County, Barings, and Procter & Gamble, where collectively billions of...
  • Finance
    Zvi Bodie and Robert C. Merton (2000)
    Works through all the main topics of corporate finance, as well as ranging into other topics, giving the book a broader scope than usual for such textbooks. Focuses on practical financial decision-making and applied finance. Aimed at MBA and undergraduate students and business professionals, using an integrated approach to teach the basics of finance.
  • Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
    Nassim Nicholas Taleb (2nd ed 2005, originally 2001)
    The author is a professional trader and mathematics professor who wants to change how we think about risk, probability, and random events. A readable account of the tendency to explain random events as due to cause and effect rather than chance. Considers the real nature of success and failure among traders, and compares this to other professions, where skill and practice bring improvement and success.
  • Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
    Steven D. Levitt and Stephen J. Dubner (2005)
    Urges the reader to look deeper into the underlying causes of everyday events. Examines the use of incentives and how they drive human behavior. Provides insight into a range of issues such as why crack dealers live with their parents, and trends in baby names.
  • Freefall: Free Markets and the Sinking of the Global Economy
    Joseph Stiglitz (2010)
    Describes the course of the global financial crisis, which began in 2007, and the underlying causes. Argues that much more radical reforms are needed than those currently being implemented, if the world is to avoid similar systemic crises in the future. Shows why the bailout has been only marginally effective and explains how it could have had a much more positive impact.
  • Futures, Options, and Swaps
    Robert W. Kolb and James A. Overdahl (5th ed 2007, originally 1994)
    A comprehensive educational tool for those wanting a detailed grounding in these complex derivatives. Explains difficult concepts that the student needs to understand in this very technical subject area. Useful for non-quantitative capital market professionals who are looking for a broad introduction to derivative instruments.
  • Inventing Money: The Story of Long-Term Capital Management and the Legends Behind It
    Nicholas Dunbar (2000)
    Tells the story of the unfolding drama and high-profile collapse of one of the biggest hedge funds in the world. Gives insight into the arcane workings of the hedge fund industry and its biggest players, including Nobel Prize winners. Looks at the opportunities and risks of derivatives, and their use by LTCM.
  • IOU: Why Everyone Owes Everyone and No One Can Pay (also published as Whoops)
    John Lanchester (2010)
    Explains the developments that precipitated the global financial crisis in terms that anyone can understand. Provides new insights into how the financial crisis developed in a lucid and witty manner. Points out that the critical factor that caused the crisis was that banks could sell loans on to investors, removing the relationship between lenders and borrowers—it no longer mattered whether the lender thought the borrower could repay the loan.
  • Irrational Exuberance
    Robert J. Shiller (2nd ed 2005, originally 2000)
    Uses a combination of economics, econometrics, sociology, and psychology to analyze stock market movements, and explain how speculative bubbles come about. Cautions that the market in 2000 was overvalued by historical standards, which made it inherently unstable, and therefore liable to crash. Analyzes why the current housing market crisis is part of a speculative bubble, which may trigger declining home prices for many years.
  • Liar’s Poker: Rising Through the Wreckage on Wall Street
    Michael Lewis (1989)
    Shows the reality behind bond trading in the 1980s—the deals, the salaries, the greed, and the ambition. A funny and absorbing insight into human nature, it explores the drivers of success and failure in a complex, dynamic financial environment. Examines how a culture of excessive competition contributed to Salomon’s financial collapse.
  • Lords of Finance: The Bankers Who Broke the World
    Liaquat Ahamed (2009)
    Lords of Finance provides a fascinating insight into the policy failures that led to the Wall Street Crash and the Great Depression. It explores the parallels and the differences between the dramatic events that took place in the late 1920s and early 1930s and the global financial crisis that developed in 2008. The author gives new insights into how financial crises develop and the enormous impact that central bankers can have on the lives of...
  • Market Wizards: Interviews with Top Traders
    Jack D. Schwager (1989)
    Shows how successful traders have beaten the markets and made millions, through detailed interviews that discuss their strategies and trading techniques. Provides a number of themes that offer useful advice for all levels of investors wanting to improve their trading approach and methodologies. Discusses traders from a variety of areas, such as the futures and currency markets, equity trading, and floor trading, and examines the psychology of...
  • Mastering Risk, Volume 1: Concepts
    James Pickford (ed) (2000)
    An impressive cast of contributors bring the latest ideas on the management of financial risk and offer a guide to best practice. Provides a comprehensive overview of the key concepts of risk management. The practical relevance of these concepts is highlighted throughout with recent examples and short case studies.
  • Option Volatility and Pricing: Advanced Trading Strategies and Techniques
    Sheldon Natenberg (1994)
    One of the most widely read books among active option traders around the world. Although geared primarily towards professionals and traders, it will also be useful for amateurs interested in how to trade options. Points out the key concepts essential to successful trading, including option pricing, and strategies for training up to a desired level.
  • Options, Futures, and Other Derivatives
    John C. Hull (8th ed 2011, originally 1989)
    Introduces the world of derivatives, pricing, and risk management in clear and understandable terms. Provides a practitioner-focused overview of market dynamics and a feel of real market conditions. Offers a comprehensive overview of all the most relevant materials on the range of derivatives, together with derivations of all the formulas.
  • The Age of Turbulence: Adventures in a New World
    Alan Greenspan (2007)
    Tells the story of Greenspan’s early life, his professional career and his chairmanship of the Federal Reserve Board. Details why he thinks the global economy has evolved into a new and turbulent system over the last few years. Explains the dynamics behind recent world events through the perspective of his career and experiences.
  • The Global Financial System: A Functional Perspective
    Dwight B. Crane, Kenneth A. Froot, Scott P. Mason, André F. Perold, Robert C. Merton, Zvi Bodie, Erik R. Sirri, and Peter Tufano (1995)
    A collection of eight essays written by top finance academics and thinkers at Harvard Business School. Places a focus on how the performance of the financial system is evolving, and the implications this has for the future. Examines how each of the main functions of the financial system meets a basic organizational need.
  • The Great Crash, 1929
    John Kenneth Galbraith (1955)
    Entertaining account of the market mania and resulting historic crash of 1929. Tells a relevant and timely story of over-investment and market frenzy, and why financial bubbles since then have always been compared to the Great Crash. Traces the market fluctuations of the time, showing how the crash evolved and helped ignite a full economic depression.
  • The Undercover Economist
    Tim Harford (2006)
    Makes economics easier to understand by showing why it is central to how we live. Unlocks many of the economic mysteries of daily life in an interesting way. Considers how economic policy can influence how we make decisions and allocate resources more efficiently without us realizing it.
  • Traders, Guns, and Money: Knowns and Unknowns in the Dazzling World of Derivatives
    Satyajit Das (2006)
    An entertaining introduction to derivatives trading and its impact on the financial markets by a veteran of the industry. Tells the inside story of how derivatives began, how they are used, their benefits, and their dangers. Describes the mechanics of the financial markets and difficult concepts in a clear, amusing, and somewhat cynical style.
  • When Genius Failed: The Rise and Fall of Long-Term Capital Management
    Roger Lowenstein (2001)
    Tells the story behind the biggest hedge fund collapse ever seen, that sent shock waves through the whole banking system. Provides perceptive detail into all the main characters involved, including two Nobel Prize winners. Gives an absorbing account of the Federal Reserve Board’s unprecedented move to bail out the fund after thousands of its derivatives contracts started failing.

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