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Business

Convicted French banker 'Fabulous Fab' teaching economics in US

© AFP

Text by FRANCE 24

Latest update : 2014-02-26

Students who have enrolled in “Elements of Economics Analysis” at the University of Chicago this term might benefit from the unique practical experience of their teacher, Fabrice Tourre.

Tourre, a 34-year-old Frenchman, is working as a teaching assistant while studying for a doctorate in the prestigious economics department that for many years boasted Milton Friedman among its members.

Friedman was famous for winning the Nobel Prize while Tourre is notorious as the only banker so far convicted of charges arising from the 2008 Wall Street crisis.

Tourre worked for Goldman Sachs where he helped construct a scheme with which the bank could make money by packaging mortgages for sale even though it believed, rightly, that the market was about to collapse.

After the crisis, Goldman Sachs struck a deal with the US authorities and paid 550 million dollars. Tourre was tried.

Last August he was found liable on six of seven counts of securities fraud. He is appealing the size of his fine. He wants to pay 65,000 dollars, the authorities want a sum that could total more than 1 million dollars.

Meanwhile, Tourre, who used to sign e-mails “Fabulous Fab,” has gone back to school.

He already has a degree in maths from the École Centrale in Paris and a Master’s in operations research from Stanford University. Now he teaches his class on Thursday afternoons and runs a discussion section on Monday evenings.

His professors at Chicago find Tourre intelligent.

“He was one of my best students,” one professor, Nancy L. Stokey, told the New York Times.

Another, professor Robert Shimer, said: “He’s someone who, if he continues on the same track, is going to be one of our top job market candidates.”

His classmates agree.

“People like Fabrice, who come from investment banking, are very useful in the program," one told the Wall Street Journal. "As academics we tend to be on the outside, and investment banks tend to be closed. People are joking that economists develop these models, but the real world is much messier.”

'Face of Wall Street greed'

The question is whether someone with Tourre's history should have an academic career.

“Would any business school be willing to hire Tourre who has become the face of Wall Street greed?” asked Michael A. Santoro, a professor of ethics, in the New Yorker magazine.

Santoro then quoted another academic, Hervé Alexandre, a finance professor at Université Paris-Dauphine, who said of Tourre: “He’s very skilled in pricing highly complex products, which are still very important for the future of finance.”
 

Date created : 2014-02-26

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