Areas of Expertise (4)
Mortgage and Lease Markets
Term Structure Modeling
Mutual Funds and Risk Management
Employee Stock Options (ESOs)
Richard Stanton is a Professor of Finance and Real Estate and holds the Kingsford Capital Management Chair in Business at Berkeley Haas. His main research interests are mortgage and lease markets, term structure modeling, mutual funds and risk management, and employee stock options (ESOs).
Cambridge University (Jesus College): BA, Mathematics 1984
Stanford Graduate School of Business: PhD, Finance 1992
Honors & Awards (12)
Financial Management best paper prize
For “CMBS Subordination, Ratings Inflation, and Regulatory Capital Arbitrage” 2018
Earl F. Cheit Outstanding Teaching Award, MFE Program
Course: Fixed Income 2013
Nomination for Journal of Finance Brattle best corporate-finance paper prize
For “Human Capital, Bankruptcy and Capital Structure” 2010
Earl F. Cheit Award for Excellence in Teaching, Undergraduate Program
Nomination for Journal of Finance Smith-Breeden best-paper prize
For “Managerial Ability, Compensation and the Closed-End Fund Discount” 2007
Best Paper award, Utah Winter Finance conference
Awarded for “A Liquidity-Based Model of Closed-End Funds” 2006
Q Group Research Award
UC Berkeley Junior Faculty Research Grant
Earl F. Cheit Award for Excellence in Teaching (Undergraduate Program)
AACSB Doctoral Fellowship
Science and Engineering Research Council (SERC) Overseas Studentship
Positions Held (1)
At Haas since 1991
2008 – present, Professor, Haas School of Business 1998 – 2008, Associate Professor, Haas School of Business 1991 – 1998, Assistant Professor, Haas School of Business
Media Appearances (15)
Black Homebuyers Today Pay An Unequal Price
NPR - All Things Considered radio
After the 2008 financial crisis, mortgage backers began charging more to borrowers with lower credit scores and less wealth—a practice that disproportionately affects Black homebuyers in America. Research by professors Nancy Wallace, the Lisle and Roslyn Payne Chair in Real Estate and Capital Markets; Richard Stanton, Kingsford Capital Management Chair in Business; and Assoc. Prof. Adair Morse, the Soloman P. Lee Chair in Business Ethics (on leave), found that fintech lenders who use algorithms to determine mortgages are just as bad as traditional mortgage operations in charging higher rates to African American and Latino loan-seekers.
Can Digital Mortgage Platforms Reduce Discrimination in Lending?
Fintech algorithms discriminated 40 percent less than face-to-face lenders when issuing loans to borrowers, according to research by Prof. Nancy Wallace, Prof. Richard Stanton, and Assoc. Prof. Adair Morse. "Discrimination is definitely falling, and it corresponds to the rise in competition between fintech lenders and regular lenders," said Wallace, Chair of the Real Estate Group and Lisle and Roslyn Payne Chair in Real Estate Capital Markets.
Why Corporations' Responses To George Floyd Protests Matter
S&P Global Ratings online
While companies like to call out their support for the Black Lives Matter movement, discrimination is often built into systems. Minorities are discriminated against by lenders, according to research by Prof. Nancy Wallace, the Lisle and Roslyn Payne Chair in Real Estate Capital Markets, and co-chair of the Fisher Center for Real Estate and Urban Economics; Prof. Richard Stanton, the Kingsford Capital Management Chair in Business; and Assoc. Prof. Adair Morse, Soloman P. Lee Chair in Business Ethics.
UC Berkeley professors suggest mortgage crisis may be imminent amid coronavirus pandemic
Daily Californian online
Prof. Nancy Wallace, chair of the Real Estate Group and the Lisle and Roslyn Payne Chair in Real Estate Capital Markets, and co-chair of the Fisher Center for Real Estate and Urban Economics, and Prof. Richard Stanton, the Kingsford Capital Management Chair in Business, have argued that narratives surrounding the 2008 recession typically focus on the housing bubble, while the role of nonbank financial institutions in the crisis is understated. That could also be the case now as the economy heads towards recession. "The fundamental problem is the same, since as in 2007 we also saw large scale bankruptcy amongst nonbank lenders," Wallace said.
This Is What Racism Sounds Like in the Banking Industry
New York Times online
Jimmy Kennedy earned $13 million during his nine-year career as a player in the National Football League. He was the kind of person most banks would be happy to have as a client.
Bad, biased, and unethical uses of AI
The Enterprisers Project online
Looking at cases of unethical uses of AI can help managers avoid pitfalls. One such case was studied by Assoc. Prof. Adair Morse, Soloman P. Lee Chair in Business Ethics; Prof. Nancy Wallace, the Lisle and Roslyn Payne Chair in Real Estate Capital Markets; and Prof. Richard Stanton, Kingsford Capital Management Chair in Business. In looking at online housing lenders, they found that even if the people writing the algorithms intended to create neutral systems, they've ended up discriminating against minority borrowers.
Can algorithms be racist? Trump’s housing department says no
A new rule would would make it nearly impossible for banks, landlords, or insurance companies to be sued when their algorithms result in people of color being disproportionately denied housing. But algorithms aren't necessarily unbiased. Research by Assoc. Prof. Adair Morse, Prof. Nancy Wallace, and Prof. Richard Stanton has found that online lenders habitually charged borrowers of color higher interest rates than white borrowers with similar credit profiles.
Knowing the “Value” of Our Data Won’t Fix Our Privacy Problems
Electronic Frontier Foundation online
Policies have been proposed that would put a dollar value on the data that companies collect from users. But that's not enough to protect consumers. For example, research by Assoc. Prof. Adair Morse, Prof. Richard Stanton, Kingsford Capital Management Chair in Business, and Prof. Nancy Wallace, Lisle and Roslyn Payne Chair in Real Estate Capital Markets, has found that data on potential borrowers was used to discriminate against non-white customers by online mortgage firms.
Berkeley Haas’s Morse: FinTech Also Practices Housing Discrimination
Poets and Quants online
Assoc. Prof. Adair Morse of the Haas Finance Group, Prof. Richard Stanton, Kingsford Capital Management Chair in Business, and Prof. Nancy Wallace, Professor and Chair of the Real Estate Group, found that fintech lenders who use algorithms to determine mortgages are just as bad as traditional mortgage operations in discriminating against African American and Hispanic loan-seekers.
Digital mortgages are here, but some buyers are hesitant to use them. Here's what you should know.
Chicago Tribune online
Algorithmic bias is replacing human bias in mortgage lending, according to research by professors Richard Stanton, Nancy Wallace, and Adair Morse.
Women can benefit more from stock options study reveals
Wealth Professional Canada online
Work by professors Richard Stanton and Nancy Wallace has found that options awarded to women cost companies 2 percent-4 percent more than those given to men. Senior managers also cost more than lower-ranking colleagues. The difference comes from how long the employees hold them.
Women Hold Onto Stock Options Longer—and Reap the Benefits
Women hold onto their stock options longer than men—which can mean employers pay out more, according to work by professors Richard Stanton and Nancy Wallace.
Non-bank firms are now big players in America’s mortgage market
As interest rates rise and the housing market stutters, regulators are again pondering the risks from the mortgage market—this time from a shift towards non-bank originators. A recent paper by Professors Nancy Wallace and Richard Stanton warned of the risks posed by non-bank US mortgage lenders, who now represent a large percent of all real estate loans. When banks stopped lending during the financial crisis, the number of mortgage companies fell by half, and non-bank lenders stepped in. Little is known about the finances of these private lenders, and their finances may be fragile.
Online lending hasn't removed discrimination, study shows
A study by Assoc. Prof. Adair Morse, Prof. Richard Stanton, and Prof. Nancy Wallace, found that both online and face-to-face lenders charge higher interest rates to black and Latino borrowers.
How some algorithm lending programs discriminate against minorities
NPR - Morning Edition radio
Washington Post columnist Michelle Singletary discusses work by Assoc. Prof. Adair Morse, Prof. Richard Stanton, and Prof. Nancy Wallace, that found a bias in lending: for people with similar qualifications applying for home loans, race did play a factor.
Selected Papers & Publications (6)
Mortgage Loan-Flow Networks and Financial NormsReview of Financial Studies
R. Stanton, J. Walden and N. Wallace
CMBS Subordination, Ratings Inflation, and Regulatory-Capital ArbitrageFinancial Management
R. Stanton and N. Wallace
Financial Flexibility, Bank Capital Flows, and Asset PricesJournal of Finance
R. Stanton, C. Parlour and J. Walden
Estimation of Dynamic Term Structure ModelsQuarterly Journal of Finance
R. Stanton and G. Duffee
The Bear’s Lair: Indexed Credit Default Swaps and the Subprime Mortgage CrisisReview of Financial Studies
R. Stanton and N. Wallace
Revisiting Asset Pricing Puzzles in an Exchange EconomyReview of Financial Studies
Richard Stanton, Christine A. Parlour, and Johan Walden
Introduction to Finance
Fixed Income Markets