Biography

Sought-After Expertise

The University of Chicago wrote of her “Structured Success.” Business Week called her “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 Journal of Structured Finance, 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.

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. She issues ongoing warnings about current underestimated risks.

She has appeared as an expert before forums of the International Monetary Fund, the Federal Reserve Bank, the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission.

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.

“Tavakoli’s Law of Sovereign Bailouts” states that 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. Governments allow this chiefly for the benefit of banks.

Derivatives and Securitization Expertise

Risk management, securities, derivatives, credit derivatives, total return swaps, leverage, stocks and hedges, complex derivatives, structured insurance and reinsurance, mortgage backed securities, interest rate swaps, synthetic collateralized debt obligations, securitizations, sovereign debt and related currencies, insurance-linked securities, auction-rate securities, tender option bonds, principal protected notes, asset-backed commercial paper programs, et al., and rating agencies’ ongoing role in incorrectly rating securities.

Global Experience

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. 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 and credit derivatives development for Bank One in Chicago. At Bank of America, she was the CreditMetrics_TM Manager for the bank’s co-sponsorship with JP Morgan and structured and sold structured products and credit derivatives. 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.

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.

Groundbreaking 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 fifteen years, she has advocated to revoke the credit rating agencies’ NRSRO designation for structured financial products.

Dear Mr. Buffett (Wiley 2009) is her first-hand account of her real-time warnings about the events leading up to the global financial crisis of 2008.

Risk (Lyons McNamara, 2016) reveals Tavakoli’s methodology for finding risks—missed by most financial professionals and accountants— on bank balance sheets, in structured products, and in portfolios.

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.

Education

University of Chicago Booth Graduate School of Business MBA
Illinois Institute of Technology B.S. Chemical Engineering

Ms. Tavakoli was an Adjunct Associate Professor of Finance at the University of Chicago’s Graduate School of Business (Chicago Booth) where she taught “Derivatives (including credit derivatives): Futures, Forwards, Options and Swaps.”