„Innovation is not merely the result of scientific inventions or technical breakthroughs. Innovation also critically depends on the entrepreneurial skills of those involved in the process," it says in the description of SEP Financial and Entrepreneurial Sciences of ETH Zurich (1). The programme was launched three years ago offering scientists and engineers education and training in political science and management. The project will be concluded at the end of 2004 – time for an interim assessment.

Competence Center of Finance

"The ETH Executive Board set two goals," says Erich Walter Farkas, head of the project. "The first was to establish a training programme of the highest quality in the form of a Masters course of studies; the second was to create a competence center where research and teaching in all areas of finance could be co-ordinated." The foundations for both were laid by Rajna Gibson, Freddy Delbaen and Uwe Schmock.

Gibson is Professor of Finance at the Institute for Swiss Banking at the University of Zurich, Delbaen is ETH Professor of Finance Mathematics and Schmock, who headed the project until the end of September 2003, is now Professor of Professor of Financial and Actuarial Mathematics at the Technical University of Vienna. Erich Walter Farkas, who took over the project from Uwe Schmock in October 2003, studied mathematics at the University of Bucharest, obtained his PhD from the Friedrich-Schiller University in Jena and went on to write his habilitation thesis at the Ludwig-Maximilian University in Munich. Here he was also responsible for establishing the first English language mathematics Masters programme in Bavaria.

Programme meets with great interest

First of all, the course of studies leading to a Masters degree,(2). The first course started in October 2002 and the second four months ago. Applications for the third course are now underway. In its first year the programme attracted 19 participants (men and women) and the current class has 17. The signs are that the third course will be equally successful. "We already have a large number of registrations," says Farkas and attributes this to Zurich's excellent standing as a center of finance plus the high reputations of ETH Zurich and the University of Zurich. A maximum number of 20 participants are accepted for each course, and the number of applications each year is roughly eight times more. About two-thirds of participants come from outside Switzerland. The course of studies costs roughly 5,000 CHF, whereby roughly half of the participants can apply for scholarships to cover fees sponsored by banks and insurance companies.

Distinguished lecturers for the Masters course of studies from outside academe, such as the Director of the Swiss National Bank, Urs Birchler.

"The course enables participants to come to grips with theory, concepts and methods of scientific quantative finance. The proportion of maths in the course material is quite high, but in its entirety the course is a combination of economics and maths," explains Farkas. "What makes this Zurich model so unique is the fact that it is jointly organised and run by the Faculty for Business Administration of the University of Zurich and the Department of Mathematics of ETH Zurich. An ideal combination." And he summarises, "The route has been long and there have been obstacles to overcome. For example, it wasn't clear at first how the concept of the programme would be made compatible with specifications set out in the Bologna reform plans. And then there were administrative problems to resolve. Only recently has the ETH Zurich Executive Board, as the second signatory, after the Board of the University of Zurich, given the green light to the 'Regulations governing the further education programme and the organisation. "In essence we have reached the initial goal of establishing a high-quality programme for a course of studies leading to a Masters degree in finance."

Black Friday: On 24th October 1929 share prices on Wall Street fell through the floor. The stockmarket crash precipitated the Great Depression. With tailored risk management, this might have been prevented.

The second goal, to co-ordinate research and teaching in the areas of finance by setting up a competence center, is well on the way to being accomplished with the creation of the "Center of Competence Finance in Zurich" (CCFZ) (3). The center has its headquarters at Plattenstrasse 14 at the home of the Swiss Banking Institute. "The CCFZ is still in the process of being created," says Farkas. "Until now the Masters course has been the main focus of the center. In order to consolidate CCFZ's position, however, an agreement must be reached between ETH and the University, because the current supporting programme, SEP, comes to an end in December 2004."

Center to be opened

The CCFZ will be opened officially on 25th March 2004 with a conference devoted to "Competence in Finance in Zurich's Scientific Center" (5 p.m.–8 p.m. in the Aula of the University). Opening speeches will be held by the Rector of the University, Hans Weder, and Albert Waldvogel, Senior Vice-president of ETH Zurich. CCFZ chairman Hans Geiger will give a presentation of the center, while Rajna Gibson and Walter Farkas will introduce the Masters programme. Specialist talks will follow around the theme of risk. Freddy Delbaen (Mathematics, ETH Zurich) will report on "risk mass", Abraham Bernstein (Institute of Informatics, Uni Zurich) on "Fraud detection" and Hans Caspar von der Crone (Law Faculty, Uni Zurich) on "Corporate Governance and Risk Management".