Part 2: Daniel Sutter (Graduate MSc in Banking and Finance 2021, currently Graduate Analyst at Berenberg, Wealth and Asset Management)
What did you find out in your research paper?
Our paper focuses on the impact of the European Central Bank's (ECB) monetary policy on the Swiss stock market (1999-2019). The results suggest that expansionary monetary policy shocks lower expected risk premia and increases future expected dividends by stimulating the output and profits of companies. This effect leads to the observed positive impact on firms' stock prices. However, in our work, we also found that conventional monetary policy measures only had a statistically significant impact on the Swiss stock market before the 2008 financial crisis.
Why are your findings relevant?
Our paper extends the literature on so-called "monetary spillover effects." Previous research has focused on spillovers to emerging markets or large advanced economies. There is limited evidence on spillovers to equity markets in small, advanced, and open economies such as Switzerland. The constellation of the Swiss stock market, which is dominated by companies closely linked to the Euro area, and the introduction of a minimum exchange rate of 1.20 CHF per euro in 2011 by the Swiss National Bank provides an ideal environment to study the impact of ECB monetary policy shocks.
How does a master's thesis become a publication in a peer-reviewed journal?
After I graduated from the Lucerne University of Applied Sciences and Arts, I received a call from Dr. Jürg Fausch, who supervised my thesis. He asked me if we wanted to develop the master's thesis into a publication in a scientific journal. Following my acceptance, we immediately began condensing the main results of my master's thesis. To check the robustness of the results, Jürg implemented another econometric method, which confirmed the original findings of the thesis. After multiple draft versions, we were finally satisfied with the quality of the paper and submitted it to the journal Applied Economics Letters.
How did you experience the peer review process?
After our first submission, we received a so-called "Revise & Resubmit", which is a good sign. It means that a "referee" who had read the paper for review and consideration brought up comments and suggestions that we should consider in the revision of the paper. After we included these, we resubmitted the revised paper, which was accepted for publication.
What did your education in the MSc in Banking and Finance contribute to the publication?
In addition to the methodological skills, I benefitted from the close exchange with the lecturers and the comparatively small classes. The gradual preparation for the master's thesis through several practical term papers was another component that helped me a lot.
What did you learn from writing a thesis for your professional future?
It is worth staying curious and dealing intensively with one specific topic is great fun. It was also satisfying to see how the research project ended successfully.