Equities - DVFA

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DVFA Club [Feb 2010] u
Prof. Dr. Uwe H. Schneider
DVFA Club [May 2010] u
Dr. Udo Milkau
‘Ethics and responsibility in the financial industry – Part II’
On 01 February, DVFA invited participants to attend its first Club event of 2010.
‘Ethics and responsibility in the financial industry - Part II’ was a thematic continuation
of the event in September 2009. Peter König hosted the evening, Prof. Dr. Uwe H.
Schneider, Institut für internationales Kreditrecht, presented eight topics for discussion.
Referencing the prior DVFA Club event ‘Ethics and responsibility in the financial industry
– Part I’, Prof. Schneider said that it was not plausible to define the capital market
as an 'ethics-free zone’. The financial crisis, he said, was proof to the contrary, as is the
existence of numerous other ethical standards. The financial crisis also coincided with
a political crisis with a legal Renaissance. Schneider seemed to prefer the model of self
regulation and spoke of ‘societal ostracism’ or ‘societal sanctions’ as effective deterrents
to ethically objectionable conduct.
‘Physics of the financial markets’
Dr. Udo Milkau, physicist and adjunct professor at Johann Wolfgang Goethe University,
Frankfurt, captivated the numerous guests with a fascinating look at the predictability of
systematic financial market risks.
He impressively succeeded in bridging the interdisciplinary gaps between physics,
mathematics and financial market theory. ‘Before we start, remember: even physics
cannot foretell when and how one should invest,’ said Dr. Milkau, but continued by saying
that developments in the field of physics in the second half of the 20th Century can be
very helpful in gaining a better understanding of financial market crises.
Theoretical models like Heisenberg’s uncertainty principle or the Ising model of ferromagnetism
can be starting points. Milkau demonstrated how the mere the supposition
that financial markets are ordered, linear and balanced systems proves false. On the
contrary: non-linearity is the norm, with episodes of linearity, and that order happens
only occasionally in the chaotic environment of the market.
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