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Research undertaken at Reading by Crosby/Hughes/Devaney and retirees Murdoch/Baum into commercial lease law, policy, practice and pricing since 1993 has driven Government policy and supported industry change within a significantly altered leasing environment in the UK. During the REF period, research conducted at Reading has continued to influence the self-regulation of the industry, acted as a catalyst for a new retail lease and significantly influenced industry solutions concerning aspects of commercial lease pricing. Specifically the impact has been on:
- The contents of the Commercial Leases Code of Practice currently in use;
- The 2009 Government policy statement through its monitoring research into the 2007 Code;
- Industry methods for the pricing of lease incentives through authorship of evolving Information Papers and Guidance Notes within the RICS Red Book; and
- Industry wide agreement to produce new property rental value indices and equivalent yield series affecting over 21,000 commercial properties, worth over £140 billion, held within the Investment Property Databank (IPD).
Geman's research has made contributions to exotic option pricing, insurance and catastrophic risk, high frequency trading, and the whole spectrum of commodities, from crude oil and electricity to metals and agricultural commodities. Her research identified complex options and derivatives for commodities, and their applications for risk management and the valuation of physical assets for energy and mining companies, as a relatively under-researched and neglected field, and has made several scientific contributions to it (detailed in section 2).
There are four impacts detailed in this case study:
This case study details the research undertaken in the Built Environment Research Institute (BERI), Centre for Research on Property and Planning concerning the interrelationships across regeneration, value creation and innovative funding mechanisms. Outputs have impacted at the property market and regeneration policy levels with benefit arising from benchmarking of performance, enhanced transparency, changed perceptions of regeneration areas with increased appreciation of innovative vehicles for regeneration and infrastructure delivery. The underpinning research has been published in leading journals and launched at keynote events organised by the Royal Institution of Chartered Surveyors (RICS) and the Investment Property Forum (IPF).
Research led by Stephen Taylor has resulted in the development of forecasting methods for financial market prices and [text removed for publication] analytical tool at the Macro-Financial Analysis Division of the Bank of England. These methods have been cited in papers by employees of the European Central Bank, the Central Banks of Brazil, Norway and Mexico and the Italian Securities and Exchange Commission. The ability to manage risk by making more accurate predictions about financial market prices has been particularly important since the onset of the economic and financial crisis in 2008. Taylor has developed forecasting methods to make the best use of information recorded about recent asset and derivative prices, providing more precise expectations about future stock index levels, exchange rates and interest rates. Taylor's 2005 text on `Asset Price Dynamics, Volatility and Prediction' has also had significant and far-reaching impact on students learning about Finance and Economics worldwide.
The banking crisis that followed the collapse of Northern Rock in 2007 resulted in an urgent need to inject liquidity into the financial system. In order to resolve these issues, the Bank of England asked Professor Klemperer, an expert in auction theory, to help re-dseign its long-term market operations to allow the Bank of England to auction loans backed by financial collateral of varying quality. Since 2010, this has been adopted as the Bank of England's standard mechanism for its long-term repurchase operations. The potential impact of the new auction design extends beyond the Bank of England to other central banks, private industry and to industry regulators.
Derek Bunn has led a research programme on understanding competition, market evolution, and prices in electricity markets. He and other researchers in the LBS Energy Markets Group have modelled production facilities in detail, their explicit ownerships, and the price-formation process. Their use of computational learning provides subtle insights which have eluded conventional approaches. The LBS group was the first to do this, and the approach is now widely applied. Relevance of the work is recognised via funding from major energy companies and research organisations. In terms of external impact, this work has informed extensive advice to several government inquiries, stimulated further research, and is actively used by commericial businesses.