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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.
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:
Organisations in the social housing sector have a model of how to use information to monitor the outcomes of their activities. Drawing on research which places information in its organisational context, the mechanism of Knowledge Transfer Partnerships has been used to enable Nottingham City Homes to pioneer the evaluation of its activities focusing on a major investment programme called Decent Homes. Cited in Parliamentary debates, not only has the impact shifted the strategic direction of the organisation's activities, but also it has been adopted as a model of best practice for the sector.
Between 2010 and 2012, Professor Luciano Floridi transferred knowledge about epistemological issues in the philosophy of information to Sogeti, an international information technology consultancy; and, via Sogeti, to technology and business leaders in Europe and beyond, influencing their planning for and adaptation to technological change. In the realm of public policy, Floridi developed guidelines and protocols surrounding ethical problems concerning digital and online information. He chaired a European Commission group whose `manifesto' forms part of the EU's Digital Futures initiative; influenced thinking around IP and international trade agreements; and contributed to a UNESCO action plan on ensuring equitable access to information.
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.
Scotland's Health On the Web (SHOW) was the first Healthcare Information Network of its kind and was developed in an EU project between 1996 and 1999. The original aim was to develop ways of exploiting the Web to provide trustworthy and authoritative health information in a way that was easy to find. The resulting system was adopted as the major vehicle of NHS Scotland for providing healthcare information to public and professionals. Serviced by a specially appointed team, it currently supports around 400 sites, and in recent years usage has been high, averaging around 50 million website hits per month.
Research by Oxford econometricians provided the basis for innovative new methods for predicting periods of potential financial stress and providing protection for investors against extreme events. During periods of financial stress, equity funds tend to sharply lose value while volatility tends to increase. Adding some long volatility exposure to a standard equity portfolio can significantly improve the tail behaviour of a portfolio. However, it is expensive to continually hold volatility contracts due to the volatility risk premium. Researchers at Man Group have applied the Oxford research to create new strategies to protect against tail risk and these are incorporated in their Tail Protect fund launched in October 2009.
Researchers in the Organisations, Information and Knowledge (OAK) group have developed technologies for large-scale acquisition, integration and sense-making of information acquired from a variety of sources, including textual documents, the Web and multiple devices. These technologies have had:
An economic theory of entrepreneurship developed by the University of Reading's Mark Casson (at Reading since 1969) clarified the case for UK Government business support to small to medium- sized UK exporters and provided new research instruments with which to measure its impact. UK SMEs had previously received subsidies from UK Trade and Investment (UKTI) but the economic rationale was contested. Casson's work addressed the need for more evidence and better analysis. Under Casson's leadership, the University identified a critical role played by the Government in supporting trade, and developed key methods to evaluate the impact of policy support on UK business performance. In the words of the UKTI Director of Economics and Evaluation at the Department of Business, Innovation and Skills, these have made `a major contribution to UK policy thought'.
The Information Rights Research Interest Group (IRRIG) has worked with a national non-departmental public body, the Marine Management Organisation (MMO), and Durham County Council to define best practice in data handling and sharing of information. Training and consultancy based on legal regulatory doctrinal and theoretical research has led to the MMO altering its policy and procedure in relation to freedom of information legislation and data sharing practice. Durham County Council has consolidated its Environmental Information Regulation work within the Information Management Team to improve the delivery of a consistent, joined up service to all stakeholders and has prepared a revised FOIA Procedures Packet which is widely used in the local authority.