Consultant, Expert Witness, Author, Speaker
Janet Tavakoli, founder and president of Tavakoli Structured Finance® since 2003, is an expert in credit risk, credit derivatives, credit markets, stocks and hedges, complex derivatives, structured insurance and reinsurance, mortgage backed securities, interest rate swaps, synthetic collateralized debt obligations, securitizations (e.g., collateralized debt obligations, asset-backed securities, sovereign debt and related currencies, insurance-linked securities, auction-rate securities, tender option bonds, principal protected notes, asset-backed commercial paper programs), bank exposures, and risk management.
Tavakoli is the originator of the “corruption-to-production ratio.” A low ratio encourages a nation’s growth and prosperity. A high ratio can destabilize a nation’s economy. In “Tavakoli’s Law of Sovereign Bailouts,” bad debt is never called “bad debt.” It is restructured to appear sound; banks delay acknowledging impaired debt and delay increasing reserves until the size of the haircut is negotiated and bailouts are in place. This chiefly benefits banks.
Tavakoli consults for financial institutions, insurance companies, and law firms on risk management and expert witness consulting. She has also served as an expert in large, high-profile civil suits, all of which have had successful outcomes for clients.
Books: Groundbreaking Global Finance Bestsellers
Tavakoli’s books, Structured Finance & Collateralized Debt Obligations (2003, 2008), and Credit Derivatives & Synthetic Structures (1998, 2001) are the first works to clearly explain credit derivatives, mortgage backed securities, and structured financial products. She revealed grave flaws in the methodology for rating structured financial products and abuses in the credit derivatives markets. For more than ten years, she has advocated to revoke the credit rating agencies’ NRSRO designation for structured financial products.
Ms. Tavakoli gave early warning in articles written for professional finance journals of hundreds of billions of dollars in fraud-riddled structured products that were wildly overrated by credit rating agencies. She also gave early warnings of severe balance sheet stress due to leverage and overexposure to flawed financial products at large financial institutions: AIG, MBIA, Ambac, Merrill Lynch, Bear Stearns, Freddie Mac, Fannie Mae, and more.
The University of Chicago profiled her as “Structured Success,” and Business Week as “The Cassandra of Credit Derivatives.” Credit Magazine profiled her as one of the Top Women in Credit. Research Magazine profiled her work in its cover story: “Finding the Culprits of the Crisis”. Ms. Tavakoli is frequently published and quoted in financial journals including The Wall Street Journal, Financial Times, New York Times, The Economist, Business Week, Fortune, HedgeWorld, Bloomberg, Risk Professional, and others. Television appearances include CBS’s 60 Minutes, CNN, C-Span, CNBC, BNN, CBS Evening News, Bloomberg TV, and BBC.
Janet Tavakoli has over 30 years of experience in complex finance. She has traded, structured and sold derivatives and structured products at major financial institutions in New York and London and headed marketing of complex derivatives to Japan. She is a former adjunct associate professor of finance at the University of Chicago’s Graduate School of Business (Chicago Booth) where she taught “Derivatives: Futures, Forwards, Options and Swaps.”
Janet Tavakoli is the former Executive Director, Head of Financial Engineering in the Global Financial Markets Division at Westdeutsche Landesbank in London. She headed market risk management for the capital markets group for Bank One in Chicago. Tavakoli headed the asset swap trading desk at Merrill Lynch in New York, headed mortgage backed securities marketing for Merrill Lynch in New York, and headed mortgage backed securities marketing to Japanese clients for PaineWebber in New York. She also worked for Goldman Sachs in mortgage marketing and for Bear Stearns heading marketing for quantitative research.
During her career, she has been registered and licensed with the SFA, NASD, ASE, CBOE, NYSE, PSE and the NFA and has passed the Series 7, 63, 65, and 3 qualifying exams. As a risk consultant, she is not registered or licensed with these agencies, since she is not affiliated with an investment advisory or a brokerage firm.
Ms. Tavakoli has served as an Adjunct Associate Professor of Finance at the University of Chicago’s Graduate School of Business (Chicago Booth) where she taught derivatives: futures, forwards, options, credit derivatives, and swaps. She holds a B.S. in Chemical Engineering from the Illinois Institute of Technology, and an MBA from the University of Chicago’s Booth Graduate School of Business with concentrations in finance and statistics.