"FERI Cognitive Finance Institute" establishes novel view of capital markets

FERI AG has launched the "FERI Cognitive Finance Institute", a private-sector research initiative dedicated to the in-depth analysis of economic processes and phenomena of real capital markets. The aim of the "FERI Cognitive Finance Institute" is to overcome acute explanatory deficits in today's capital market models and thus provide investors and asset holders with better orientation.

"The increasing criticism of existing methods and models of economic and capital market research is well known in academic circles, but has not yet produced any meaningful alternatives," says Dr. Heinz-Werner Rapp, founder of the FERI Cognitive Finance Institute. The most recent example, he says, is the major financial crisis from 2008 onwards, whose origins, course and dynamics have still not been satisfactorily explained by established science.

The aim of the FERI research initiative is therefore to actively contribute to the renewal of traditional economic and capital market theory through changed perspectives, novel methods and a deliberately interdisciplinary approach, he said. "Capital markets are complex, adaptive and dynamic systems that depend to a large extent on human perceptions and behaviour," Rapp said. Consequently, new insights, for example into the background of bubbles or crashes, could only be gained by incorporating the latest research findings from the field of neuroscience and cognitive science.

Proprietary analysis approach

The "Cognitive Finance" methodology is an analysis approach developed by the FERI Institute under the direction of Dr. Heinz-Werner Rapp, which integrates central findings from cognitive theory, modern neuroscience and complexity research. Based on this fundamentally new methodology, relevant developments in six central topic areas - the financial system, economy, environment, politics, society and technology - are then analysed and condensed into a dynamic scenario picture.

"Within the framework of these future scenarios, which we outline as a big picture, we take a clear position and provide investors with valuable bases for decision-making and strategic guidelines," says Rapp. In this way, the institute performs an important educational and early warning function - for example, in the forward-looking classification and interpretation of systemic or geopolitical developments as well as in the derivation of concrete risk scenarios. "The challenges for investors and asset owners will become increasingly complex in the coming years," says Rapp. This is due, for example, to risks such as the Western sovereign debt crisis or the already clearly foreseeable late consequences of extreme monetary policy, he says.

Interdisciplinary research network

The FERI Institute cooperates with renowned universities, institutes and other research institutions and thus offers a top-class knowledge and insight platform. The network includes distinguished international experts from academia and practice, such as central bank critic Prof. Dr. Richard A. Werner or wealth researcher Prof. Dr. Thomas Druyen.

Current research projects of the FERI Cognitive Finance Institute include a joint study with the WWF on the relevance of global climate risks for investors as well as a scenario analysis on "Helicopter Money" and "Overt Money Financing" (open underwriting of sovereign debt by central banks).

"With the Cognitive Finance Institute, we are following FERI's 30-year tradition of pioneering spirit, research expertise and intellectual innovation," emphasises Dr Heinz-Werner Rapp.