Lucio Sarno: Great Teaching Is About Relevance & Ethics

Lucio Sarno at City University's Cass School is among the best 40 business school profs under 40

Lucio Sarno at City University’s Cass School is among the best 40 business school profs under 40.

What do the International Monetary Fund, European Central Bank, Central Bank of Norway, Bank of Canada, Central Bank of Colombia, Credit Suisse of London, Federal Reserve Bank of St. Louis, and World Bank all have in common? Lucio Sarno. At just 39, this finance professor from Cass Business School has been involved in policy advice, training, research, and consulting projects for monetary institutions and financial institutions around the globe. He is a research producing machine having authored over 60 articles in top economics and finance journals and more than 1,000 citations in the ISI Web of Knowledge.

My teaching philosophy is to teach finance combined with two crucial ingredients. First, it must be relevant to the real world and, second, it must have an emphasis on the importance of ethics in applying the tools we learn. The first ingredient is critical to me since a lot of academic research in finance is unnecessarily mathematical and that can frustrate students, as it should, unless I am able to make clear how and why financial economics and the analytical tools I teach can help us make better decisions in practice.

The second ingredient is equally important. Finance is often seen as a subject that deals with profit generation and a greed culture. However, I was attracted to finance as a branch of economics or social science more generally, only because it is about the allocation of scarce resources and about making decisions that can have first-order effects on improving standard of living for society, not just for individuals. I try to get across to students the fundamental point that they carry the responsibility of making the world a better place through their careers, and that’s what they should strive for.

My main research interests are in international finance, and more specifically on the behavior of exchange rates and interest rates. I am routinely called for advice by governments, international organizations (including the US Federal Reserve, the European Central Bank and the International Monetary Fund) and financial companies around the world. My writings and advice have influenced several matters of policy, including the operating procedures of central banks in the foreign exchange market, the design of exchange rate policies, the prediction of currency fluctuations and currency crises, the use of capital controls, the management of public debt and the assessment of currency risk.

My most rewarding moment as a professor was the first time I received a standing ovation from the students. It was unexpected, and it was at the last lecture of my international finance course at a former institution, the University of Oxford, 10 years ago. That’s a feeling I will remember forever.

As far as my academic research goes, research is incredibly rewarding every time I discover something. Research is a journey where you begin from darkness and ignorance about an issue, and through months of careful investigation you arrive, eventually and hopefully, at a point where you and your collaborators finally see the light, you understand something that the rest does not, and then you search the simplest and easiest way to explain your discovery and disseminate it across your peers and your students. The process of discovery and that moment when you see the light at the end of this journey is the most rewarding and exciting aspect of being an academic.

The main advantage of being a young professor is that I can still remember very well what it means being a student, and that, I believe, allows me to understand students’ needs and emotions. Another advantage is in terms of attitude towards research: being younger also means that it is easier to think out of the box or to think differently than the conventional wisdom in finance, to take a fresh look at the way financial markets behave. The disadvantage is exactly the other side of the coin: just like other human beings, professors learn from mistakes and from being able to see the “big picture” in what you teach and research. That learning requires experience, and time.

I like to know a little bit about every one of my students. I often offer students a glass of Italian prosecco during the short break of a lecture, and students love it, as I do; it is just an opportunity and a simple way to reduce the distance between the professor and the students. I also like to run a cinema club with my graduate students, whereby we watch and discuss a classic movie at my London flat, and the movie is chosen by democratic voting.

I find that Cass students are very diverse in terms of background, both cultural and educational. But they have in common that they are bright, energetic and proud of being at Cass.

If I wasn’t teaching, I would run a fish restaurant on the Amalfi Coast.