Reena Aggarwal had planned to focus on teaching and researching this fall. No such luck, thanks to the country’s economic chaos.
“We have just seen investment banking, as it previously existed, cease to exist,” says the international finance expert. “A major part of my research in the past has been about how companies raise capital, the role of investment banks and the issue of corporate governance. Obviously, we are facing huge corporate governance issues, which will impact my research and my teaching in a very big way this semester.”
Aggarwal was examining a graph of the Dow on her computer screen one October morning when she was running a bit late for an appointment. It was shocking.
“The Dow dropped 800 points and was below 10,000,” she says, referring to the Dow’s close on Oct. 6. “I had never seen anything like this.”
For Aggarwal, a Stallkamp Faculty Fellow and professor of finance, the recent U.S. financial crisis means that she is spending even more time researching the market. A growing fear of a global recession has the financial scholar keeping up with the market in an all-consuming way.
“The financial market is literally changing by the minute,” Aggarwal says. “There is a lot of fluff in the mainstream media right now about the status of the U.S. and international economies, but you really have to go much deeper to understand what exactly is going on.”
Since the Wall Street crisis erupted in September – when the federal government decided to take over mortgage giants Fannie Mae and Freddie Mac – Aggarwal has helped the Georgetown community better understand the complex causes and consequences of the economic downturn. She has addressed several alumni forums and student town hall meetings to explain the recent turbulence in the economy.
“As a professor in the business school, I feel it is my responsibility to reach out to the Georgetown community at this time and put as much information in front of them as possible,” says Aggarwal. “The current financial situation is fascinating as both a teacher and a researcher … my biggest challenge lately is not enough hours in the day.”
Teaching Amid the Turbulence
The roller coaster markets of late have Aggarwal on her toes and she predicts upcoming MBA classes will bring many surprises.
“The weekly course topics I am teaching are changing – not by the day, but literally, by the hour,” says Aggarwal. “I have told the students to expect changes as we go along because the whole financial industry is going to look completely different now than how it has looked in the past.”
She is bringing in speakers from the world’s leading investment banks and advisory firms to talk with students.
“It would have been great to hear from them regardless of the financial situation, but now it will be very interesting to hear from them about what is happening in their fields and what the future holds for this industry,” she says.
The crisis hits home as she prepares her students to enter the workforce. MBA student Francis Vincent (G’09) says he had considered going into investment banking, but now is seeking alternatives after a summer internship with Lehman Brothers, which went bankrupt in September. A Japanese firm later acquired Lehman.
“Since many of the investment banks went bankrupt in September, I have been talking a lot more with professor Aggarwal to understand the situation and also learn about different career options,” Vincent says. “I really trust and appreciate her knowledge and advice.”
As co-president of the MBA Finance Club on campus, Vincent has worked with Aggarwal on a regular basis and considers her a mentor. “She is always accessible … and always willing to help,” he says.
Beginning the Climb at the Hilltop
Aggarwal started her career at Georgetown as an assistant professor at the business school in 1986 after receiving an engineering and business management degree from the Birla Institute of Technology and Science in Pilani, India, and a Ph.D. in finance at the University of Maryland. Georgetown’s location attracted the young professor to the Hilltop, she says.
“It has been great being located in Washington because of the corporate governance and regulation work I enjoy,” Aggarwal says, adding that she has “gotten the opportunity to be a teacher at a great institution” while consulting for the U.S. Securities and Exchange Commission, the World Bank and the United Nations and other institutions.
Aggarwal has served in leadership positions at the business school more than once, including as deputy dean from 2006 to 2008 and interim dean from 2004 to 2005. During the latter period, she helped develop the evening MBA program and executive master’s in leadership program.
As deputy dean, Aggarwal helped lead the effort in creating the global executive MBA (GEMBA) program, a joint program with the university’s Walsh School of Foreign Service and ESADE Business School in Spain. Participants in GEMBA travel across four continents to participate in six residency modules designed to immerse students in the complexities of international business and help them develop new skills in management and leadership.
Aggarwal credits the university for her interest and later career in international finance.
“I never thought about putting finance into a global context until I came to Georgetown, but once I was on campus surrounded by an international community, it was hard not to think globally,” Aggarwal says. “Now, I think of myself as a real global citizen; I grew up in India, I live and have raised my children in the United States, I teach students from around the world, and I help companies on a global level.”
Aggarwal has been involved with the stock exchanges and financial regulations in numerous countries, including Mexico, Ecuador, Peru, Vietnam and India. With an expertise in Latin American privatization issues and raising capital, she won a Fulbright scholar award in 1991 and 1992 to do research in both Chile and Brazil. Last month, she briefed top government and private sector officials from Nigeria on the state of the global economy and what’s to come.
“I really enjoy … that I am able to apply my research to the real world and help countries and institutions,” Aggarwal says.
She shares that philosophy with her colleagues as she takes time to mentor junior faculty.
“Working with Reena is an unbelievable learning experience,” says Sandeep Dahiya, a finance professor at the business school. “She is so well respected in her field of study, and she always goes above and beyond to give advice, and even volunteer her own time, to help fellow colleagues.”
Mike Psaros (G’89), a business school board member and former student of Aggarwal, says he greatly benefited from Aggarwal’s intellectual rigor, logic and exactness.
“What she brings to the classroom is truly a gift,” says Psaros, co-founder and managing partner of KPS Capital Partners. “Her policy is always students first – and her door is always open to talk.”
