At UBC Sauder, faculty members are more than just ‘professors.’ They conduct impactful research that is changing how society views the world while also inspiring students to pursue their academic passions and become the thoughtful, values-driven leaders the business world needs.
This year, UBC Sauder welcomes nine new full-time lecturers, tenured and tenure-track faculty to the school. In the second of this series, we introduce you to Isha Agarwal, Assistant Professor, Finance Division, UBC Sauder School of Business.
What brought you to UBC Sauder?
I am starting a new position as an assistant professor in the finance division. I am very excited to be a part of UBC Sauder community and I look forward to learning from and collaborating with some of the brightest minds in the profession.
What are your areas of research and how did you get into this field?
My broad areas of interest are banking and international finance. In particular, I am interested in understanding the role of the banking sector in the transmission of macroeconomic shocks to the real economy. I got interested in this field during my graduate studies at Cornell. I was thinking about my dissertation at a time when macroeconomists were still trying to understand the effectiveness of Federal Reserve Bank’s quantitative easing policies and, in particular, the role of banks in the pass-through of such policies to the real economy. I found these research questions very exciting and decided to develop my research agenda around these questions.
What fuels your research – what prompted you to research this area?
One of the key lessons from the global financial crisis is that there can be significant spillovers of shocks from the banking sector to the real economy and vice versa. With new developments in the banking landscape (digital payments, shadow banking), in addition to complexities generated by negative interest rates, we need to constantly update our understanding of the complex interactions between the banking sector and the real economy. We barely understand, for instance, how negative interest rates affect banks’ portfolios. Research on these issues is still at a very nascent stage and we have a lot of interesting questions to answer, which is exciting for me.
What inspires you to teach?
I believe teaching plays a very important role in the overall development of any scholar. I think I learn the most when I teach. I also really enjoy interacting with my students. Their fresh perspective on concepts we take as given sometimes helps me see my own research in a new light.
What’s the most interesting thing you’ve discovered through your research?
I found that contrary to the traditional view, domestic currency appreciation may not always negatively affect an economy. If banks have more foreign currency liabilities than foreign currency assets on their balance sheets, an appreciation of domestic currency could have a net positive effect on economic activity.
What do you believe is the future of your industry?
The banking industry is becoming highly digitized and banks now have access to hard information about individuals and firms at a scale that’s unprecedented. An important question that the industry faces today is how will such large amounts of information change the banking landscape. A key function of traditional banks is to reduce information asymmetries in the market for investors and borrowers. With large amounts of data on firms and individuals, how should we think about the most fundamental function of banks? What does it imply for risk taking? Is the difference between banks and non-bank financial companies still relevant? How should we alter macro-prudential regulation to reflect this fundamental change in the banking industry? These are some of the big questions that will be quite relevant going forward.
What are you most looking forward to in Vancouver?
I think Vancouver has a lot to offer. It has the perfect balance of the quietness of a countryside as well as the radiance of a vibrant downtown, and I am excited to explore both aspects of the city. I am looking forward to exploring the beautiful parks and hiking trails in Vancouver and neighboring areas.