The Hermes European Center of Excellence

The Center for Banking and Financial Research at the University of Cyprus was established in 1993. Quickly it gained a reputation as the premier research institute in the areas of computational finance and economics. The Center's faculty, graduate students, and visitors pursue a broad research agenda that focuses on optimal financial decision making from both the supply side (financial institutions) and the demand side (households and institutional investors).

Emphasis is placed on the challenges created for both sides by the globalization and innovations of the financial markets, and on the peculiarities of the local economy as it moves towards harmonization with European Union. Currently, the Center has gained the status of European Center of Excellence on Computational Finance and Economics, under the aegis of the EU Fifth Framework Programme.

Models for risk management, developed at the Center, based on scenario analysis and the optimization paradigm of planning under uncertainty, have been used for insurance firms, money management firms and Banks in Cyprus, the United States, Italy and Switzerland. Two patents on high-performance computational methods for the valuation of complex fixed-income securities are held by Center faculty.

The Center established the first high-performance parallel computing laboratory in Cyprus, and developed innovative models for managing international portfolios, for corporate bond portfolios, and for the computer-aided design of financial products. Faculty of the Center have pioneered a major international study on the structure of household portfolios, in collaboration with research Centers in Italy and the Netherlands, and the Federal Reserve in the United States. A Pan-European Study on the performance of financial institutions, also initiated by the Center faculty in collaboration with The Wharton Financial Institutions Center in the United States, develops a major database for use by researchers studying the drivers of performance of financial institutions. Faculty of the Center have taken the initative in establishing the Real Options Group (ROG), an international organization promoting research and training in this new and very exciting field of finance.

Theoretical modeling, empirical data-driven research and the use of computations are the cornerstones of the disciplinary approaches of the Center's research, that brings together faculty and graduate students from finance, economics, accounting, management sciences, mathematics and computer science,

Stavros A. Zenios
Director

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Last Update: June 3, 2002. Design and maintenance person in charge