Tag: Mark Taylor

Julie Hail Flory originally wrote this article for The Source.

Mark P. Taylor, dean of Olin Business School at Washington University in St. Louis, will conclude his deanship June 30. He will continue to serve as the Donald Danforth Jr. Distinguished Professor of Finance after taking a year of academic leave, starting July 1 and returning to the university in 2023.

“Mark Taylor has been an exceptional leader and advocate for Olin Business School during his time at the university,” Chancellor Andrew D. Martin said.

‘The school has flourished’

“He has enhanced Olin’s international profile and made significant strategic investments in digital education. During his tenure as dean, the school has flourished, growing by nearly every measure. I’m grateful for his many contributions,” Martin said.

“We’ve been fortunate to have a talented leader and scholar like Mark Taylor guiding Olin Business School for the past five-plus years,” Provost Beverly Wendland said. “As dean, he has moved the school forward in numerous ways. He launched several innovative programs and increased student access, ensuring that the world’s best business students are able to come to WashU. I know the Olin community shares my appreciation for Mark’s leadership throughout the pandemic and takes pride in the successful triple accreditation achieved during Mark’s tenure.”

Taylor was appointed dean in 2016, joining Washington University from the University of Warwick, U.K., where he had served as dean of Warwick Business School and professor of finance. He also has held professorships at Oxford University and Bayes Business School in the U.K., and visiting professorships at New York University, Bordeaux University and the University of Aix-Marseille.

A leading scholar

A leading scholar in international economics and finance, Taylor is one of the most highly cited economists in the world. He has served as an adviser at the Bank of England, the World Bank and the International Monetary Fund.

“It has been a great privilege to lead the Olin Business School. We—Olin’s faculty, staff and students— have accomplished so much in the past five-plus years, even through a pandemic,” Taylor said. “I am proud of Olin’s advancements in research, teaching and impact.”

A search committee to identify Taylor’s successor will be announced later this year. During the transition, Anjan V. Thakor, the John E. Simon Professor of Finance and director of doctoral programs and the Wells Fargo Advisors Center for Finance and Accounting Research, will serve as interim dean.

“It is my distinct pleasure to step in to guide Olin Business School as interim dean during this important time,” Thakor said. “Building on the school’s strong foundation—which has been significantly bolstered by Mark Taylor’s leadership as dean—we are poised to reach even greater heights as one of the world’s top business schools. I look forward to working with our students and my faculty colleagues as we continue to advance our efforts to change the world for good.”

Russia is facing a financial meltdown. In response to its invasion of Ukraine, the U.S. and global allies have hit Russia with financial sanctions, isolating the country from the global financial system. In particular, the penalties on Russia’s central bank have effectively frozen the vast majority of its foreign-held assets.

The unprecedented scale and unanimity of these penalties will be crippling to the Russian economy, according to Mark P. Taylor, dean of Olin Business School and the Donald Danforth Jr. Distinguished Professor of Finance.

But what does this all mean? And what affect might these sanctions have on the global economy today and in the future? Taylor, a leading global authority on international finance, answered these questions and more.

What does it mean to freeze a nation’s assets?

According to Taylor, freezing a nation’s assets is very similar to freezing an individual’s bank account. The money is still there and may even earn interest, but the account holder — in this case, the Russian government and wealthy oligarchs — cannot access it.  

While it’s difficult to get a full handle on just how much Russian money is held outside its borders, Taylor said there is evidence that Russia has stockpiled over $600 billion in foreign currency reserves. The vast majority of that is frozen. Among the countries where Russia holds the bulk of its foreign reserves, only China has not imposed sanctions on Russia to date. 

“On top of that, there are other sanctions on individuals and corporations,” Taylor said. “For example, Russian individuals have approximately $11 billion in deposits in Switzerland, a major financial center, right now. And that’s bank deposits. That does not include securities and bonds. The true number could be five times that — like $50 billion — just in Switzerland. That money is frozen.”

‘It’s a new form of economic warfare. No one wants to go to conventional war with Russia, but this will definitely impact them severely.’

Dean Mark P. Taylor

Historically, the government, Russian businesses and wealthy oligarchs have chosen to hold their assets in foreign banks because the currencies are less vulnerable than the ruble, Taylor explained.

Making matters worse for Russia, the country also has been cut off from SWIFT — a platform for facilitating money transfers that is integrated into banking systems worldwide — making international payments difficult.

“Initially, people thought Russia would route payments through China,” Taylor said. “But that’s not happening, interestingly. There’s no evidence that Russians are circumventing sanctions by going through China, possibly because Chinese banks are worried about sanctions as well.”

How have these sanctions impacted Russian, global economies?

The effect of these penalties on the Russian economy has been severe and immediate. The ruble and stock market are down 30-40%, Taylor said. Russians are lining up at banks and ATMs to withdraw their money. And it will be increasingly difficult for Russia to import necessities with a large percent of its assets frozen and no way to make international payments.

Russia’s biggest trading partners, India and China, are still willing to trade with the country, Taylor said. But many companies throughout Europe had already stopped purchasing and selling to Russia since the sanctions imposed on the country when it invaded Crimea in 2014.

Globally, the biggest concern is the impact these sanctions will have on energy prices and how that might contribute to inflation.

“Russia is the biggest producer and supplier of oil and natural gas to Europe in particular,” Taylor said. “Prices were already high and have gone up even more since the start of the conflict. This will have an impact on global energy prices and so have a ripple effect beyond Europe and will also be felt in the U.S., for example.”

If the energy price hikes are sustained, it could exacerbate inflation. Faced with higher energy bills, households will have less money to spend elsewhere. And businesses will be forced to raise prices in response to the higher energy costs. But we’re not there yet, Taylor said.

“People are panicking at the moment. A lot of the energy price hikes depends on what happens in the conflict. If the price increases do not last for long, it will not have a significant impact on trade and inflation. The pain will be tolerable,” Taylor said.

A new form of economic warfare

Financial sanctions are not new, of course. In recent years, the EU and U.S. have imposed financial sanctions on Myanmar and Belarus, for example. What makes this situation different, though, is the near global unanimity in which they have been applied, Taylor said. The G7 — the U.S., Canada, Germany, France, Italy, the U.K. and Japan — plus Switzerland and the EU more broadly have acted in unison to isolate and punish Russia.

While many were surprised that Switzerland broke its neutrality, Taylor sees the situation differently. “What does it mean to be neutral? If virtually the whole world is lining up to say this act of aggression is wrong, then agreeing with that doesn’t necessarily mean you’ve broken neutrality,” he said.

According to Taylor, the unprecedented unanimity in these financial sanctions on Russia is one of the few positive things to come out of the conflict. And it could change the way global powers respond to threats in the future. China, for example, will be keeping a close eye on the situation.

“These types of sanctions would not have been effective during the Cold War because the Russia and the whole Soviet bloc was largely a sealed, communist economic area. Today, however, Russia is a capitalist economy that relies on global trade and international finance, making them more vulnerable to sanctions,” Taylor said.

“It’s a new form of economic warfare. No one wants to go to conventional war with Russia, but this will definitely impact them severely.”

In the first episode of the hit TV series “Downton Abbey,” Lady Cora Crawley gently reminds her husband of the dowry she, an American heiress, brought when she left Cincinnati to marry him and relocate to rural Yorkshire. Her fortune saved the Abbey and Earl Grantham’s family from ruin.

“Downton Abbey” and a BBC miniseries based on Edith Wharton’s novel “The Buccaneers” inspired Olin Dean Mark P. Taylor to examine a historical trend:

In the four decades before the outbreak of World War I, 100 daughters of American business magnates married titled members of the British aristocracy.

“Given that British aristocracy was generally regarded as the most exclusive club in the world outside of the British royal family, this is a remarkable phenomenon,” said Taylor, who is British.

Taylor’s research premise is that the rapid decline in British agricultural prices—which shrank not only the income of aristocratic landed estates, but also the income of common families who owned land—led to a significant proportion of male aristocrats marrying American heiresses. American brides with rich dowries were substituted for brides from the traditional source: British families who had no aristocratic titles but did have land.

In “Peers, Buccaneers and Downton Abbey: An economic analysis of 19th century British aristocratic marriages,” published in the August edition of Economic Letters, Taylor provides empirical data analysis supportive of his thesis.

“This is what a year of watching TV does to an academic,” Taylor joked, referring to months of quarantining because of the pandemic.

In Britain, agricultural prices dropped because of the opening up of the American prairies, development of US railroads and the advent of steamships—”all of which led to the flooding of the UK market with cheap prairie wheat,” Taylor said.

Meanwhile in the US, high society shunned the families of wealthy businessmen. “East Coast high society was the jealously guarded preserve of families who could trace their ancestry back to the earliest Dutch or English settlers, and who socially ostracized the nouveau riche business magnates and their families,” Taylor writes.

So what were the daughters to do? Marry into the British aristocracy. Their mothers, in particular, set their sights on marrying their daughters into British nobility as a means of establishing social pedigree—at whatever the cost.

The whole trend, Taylor said, likely started with the 1874 marriage of Jennie Jerome, the daughter of New York financier Leonard Jerome, and a son of the 7th Duke of Marlborough, Lord Randolph Churchill—a union that produced Winston Churchill. Leonard Jerome settled a dowry of £50,000 on the marriage, which is about $6.5 million today.

Two years later, Consuelo Yznaga, the daughter of Antonio Yznaga, who had made his fortune in West Indian sugar plantations before relocating to Newport, Rhode Island, married the heir to the Duke of Manchester, “thereby proving that the very highest social rank below royalty was not beyond the scope of the daughter of an American business family,” Taylor writes. The dowry settlement was £200,000, or about $26 million today.

“Perhaps the most celebrated (or notorious) American-aristocratic marriage of the period, however, took place at the height of the trend in 1895,” Taylor writes. The family of the American railroad magnate William K. Vanderbilt became allied to one of the most prestigious British aristocratic families when his daughter, Consuelo, married the 9th Duke of Marlborough. The dowry settlement was $2.5 million—about $82 million today. The money restored the family fortunes and restored the palatial Marlborough ancestral seat of Blenheim Palace in Oxfordshire.

Marriages to American heiresses were part of a wider, less pronounced, phenomenon whereby non-American foreign brides also were substituted for British exogamous brides with land during much of the 19^th century when agricultural prices declined.

In addition, Taylor finds significant evidence of substitution for landed brides with British business family brides for the whole of the 18th and 19th centuries, which was less marked than the rate of admission for foreign brides but which increased over the course of those centuries.

In a time of agricultural decline, cash restraints may be imposed on lump-sum transfers (i.e. dowries) from landed families, “allowing unlanded but nevertheless rich families to offer higher lump-sum transfers in order to compensate for the lower level of prestige associated with non-landholders,” he writes, “a phenomenon which may perhaps be aptly termed the Downton Abbey Effect.”

(For “Downton Abbey” fans, the sequel film will be in theaters in March 2022.)

“Costly thy habit as thy purse can buy, but not express’d in fancy; rich, not gaudy; for the apparel oft proclaims the man…” (Hamlet act 1, sc. 3)

By now, it’s no secret that Olin Dean Mark Taylor is something of an expert on William Shakespeare. Sure, he’s got degrees in economics and finance, but he also has a master’s degree in English renaissance and romantic literature.

He’s spoken frequently about the still-valuable messages Shakespeare conveys about business leadership and management and has collaborated with the UK’s Royal Shakespeare Company.

None of that has stopped him and members of his staff from having a bit of a laugh at The Bard’s expense, however. You can find the soul of this man in the dean’s office.

Poets & Quants Editor John Byrne recently visited Washington University to learn more about Olin’s program offerings, meet with students, and talk one-on-one with Dean Mark Taylor about the school’s upcoming “strategic refresh.”

According to Byrne’s just-published interview with Dean Taylor, the pair’s discussion covered a lot of ground: the potential for a one-year MBA, the future of online learning at Olin, taking leadership inspiration from Shakespeare’s Henry V, and Dean Taylor’s love of all things St. Louis (he tells Byrne that St. Louis “feels to me like one of the world’s great cities”).

Check out some of the highlights from the interview below, and stay up-to-date on Olin’s latest happenings by following Olin and Dean Taylor on Twitter.

Considering a one-year, accelerated full-time MBA program

“I think there is an opportunity for thinking about flexibility in the MBA program. The MBA has to shift in terms of what it offers. If you look at the trend of returns to MBAs, they have been declining while the costs have been increasing. People are thinking hard about the value proposition of a traditional MBA.

“One way of thinking about MBA candidates and students is as career accelerators and career changers. Some students know exactly what career they want to be in, and they are already in it. They really want to accelerate their career, get the human capital that an MBA imparts, perhaps increase their network of contacts, and do the MBA as fast as possible. Career changers would rather take a couple of years to perhaps do one or more internships and really ponder which way they want to take their career. We have to cater to both of those audiences here.”

Olin’s close-knit community 

“Olin Business School offers world-class instruction, faculty that is second to none in the world and who are very approachable. There is an intimacy in the classroom between faculty and students that would be hard to find elsewhere in top schools. Everyone who comes to Olin has a name and a story. You are well known by the faculty and supported by an excellent staff. That is one aspect of Olin that marks us out from our competitor schools.”

Olin’s first century in business

“We were one of the first business schools to be launched in the U.S. 100 years ago. We have grown from a small class of 20 or so to one of the great business schools in the world, with extensions in Mumbai and Shanghai as well as in Washington, D.C., through the Brookings Institution. We are a full-service school with a top-ranked undergraduate program, a leading MBA program, and a range of master’s programs, executive education, and a thriving doctoral program as well.”

Interdisciplinary influences on business education

“Literature really tells us a lot about human nature and the human condition. Thinking about those issues is a very important part of humanity and being an effective business leader. The performing arts are very important, particularly in a business school education. Being able to project, persuade, and get one’s views across is in one sense a part of drama.”

What Olin looks for in students 

“We are looking for individuals who are excellent and who want to pursue excellence. We are looking for people who have a strong values system and want to have a global outlook. Our vision is global and our thinking is entrepreneurial. The environment here is a very supportive one. I wouldn’t want to be up against any of our graduates in the marketplace, but I certainly would want to be one of their colleagues.”

Read the full interview on Poets & Quants.