Boris Vallee - Faculty & Research - Harvard Business School
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Boris Vallee

Assistant Professor of Business Administration

Boris Vallée is an assistant professor in the Finance Unit. He teaches the Finance II course in the MBA required curriculum. 

Professor’s Vallée’s research traces the motives behind and the effects of financial innovation in recent decades. He pursues this line of inquiry through empirical studies of corporate finance, household finance, public finance, and financial institutions, developing novel data sets and measures. His work has been cited by Forbes and The Wall Street Journal.

He holds a Ph.D. in finance and a M.Sc. in management, both from HEC Paris, and is a CFA Charterholder. Before beginning his doctoral studies, Professor Vallée was an investment banker at Deutsche Bank in London.

Journal Articles
  1. The Political Economy of Financial Innovation: Evidence from Local Governments

    Christophe Pérignon and Boris Vallée

    We examine the toxic loans sold by investment banks to local governments. Using proprietary data, we show that politicians strategically use these products to increase chances of being re-elected. Consistent with greater incentives to hide the cost of debt, toxic loans are utilized significantly more frequently within highly indebted local governments. Incumbent politicians from politically contested areas are also more likely to turn to toxic loans. Using a difference-in-differences methodology, we show that politicians time the election cycle by implementing more transactions immediately before an election rather than after. Politicians also exhibit herding behavior. Our findings demonstrate how financial innovation can foster strategic behaviors.

    Keywords: financial innovation; Political Elections; Financing and Loans; Innovation and Invention;


    Pérignon, Christophe, and Boris Vallée. "The Political Economy of Financial Innovation: Evidence from Local Governments." Review of Financial Studies 30, no. 6 (June 2017): 1903–1934.  View Details
  2. Catering to Investors Through Security Design: Headline Rate and Complexity

    Claire Célérier and Boris Vallée

    This paper investigates the rationale for issuing complex securities to retail investors. We focus on a large market of investment products targeted exclusively at households: retail-structured products in Europe. We hypothesize that banks strategically use product complexity to cater to yield-seeking households by making product returns more salient and shrouding risk. We find four empirical results consistent with this view. First, we show that structured products with complex payoff formulas offer higher headline rates, and that they more frequently expose investors to a complete loss of their investment. We then document that banks are more inclined to issue high-headline-rate and more complex products in low-rate environments. Finally, we find that high-headline-rate and more complex products are more profitable for banks, and that their ex post performance is lower.

    Keywords: financial complexity; catering; shrouding; Reaching for yield; Investment;


    Célérier, Claire, and Boris Vallée. "Catering to Investors Through Security Design: Headline Rate and Complexity." Quarterly Journal of Economics 132, no. 3 (August 2017): 1469–1508.  View Details
Working Papers
  1. Returns to Talent and the Finance Wage Premium

    Boris Vallee and Claire Celerier

    We study the role of talent in the distribution of pay in the finance industry since the 1980s. We exploit a special feature of the French educational system to build a precise measure of talent that we match with compensation data on graduates of elite French institutions. Using this measure, we show that wage returns to talent are three times higher in the finance industry than in the rest of the economy. This greater sensitivity to talent almost fully absorbs the level of the finance wage premium, as well as its increase since the 1980s. Finally, returns to talent correlate with the share of variable compensation.

    Keywords: finance; compensation; Wages; Finance; Compensation and Benefits; Banking Industry;


    Vallee, Boris, and Claire Celerier. "Returns to Talent and the Finance Wage Premium." Working Paper.  View Details
Cases and Teaching Materials
  1. Exotic Interest Rate Swaps: Snowballs in Portugal

    Boris Vallee, Patrick Augustin and Philippe Rich

    This case explores a complex swap transaction implemented by Metro do Porto in 2007. It represents an opportunity to study fixed income derivative instruments, such as plain-vanilla swaps and structured swaps, as well as understand the opportunities and challenges of using innovative financial instruments. The public sector setting allows discussion of the political economy implications of such transactions.

    Keywords: swaps; public finance; Structured Finance; Credit Derivatives and Swaps; Public Sector; Transportation Industry; Rail Industry; Portugal;


    Vallee, Boris, Patrick Augustin, and Philippe Rich. "Exotic Interest Rate Swaps: Snowballs in Portugal." Harvard Business School Case 217-050, January 2017.  View Details
  2. Deutsche Bank: Structured Retail Products

    Boris Vallée and Jérôme Lenhardt

    Describes how Deutsche Bank, a leading European bank, is deciding whether or not to launch a new structured retail product in Germany: an autocallable note. Will this product find a market and how does it fit into the bank’s product portfolio? The case investigates how Deutsche Bank manufactures and distributes its structured retail products and more broadly explores the opportunities and challenges of offering financial products to households. The case also dwells on the scale and scope of the business of retail banking in an increasingly regulated environment.

    Keywords: structured products; structured retail products; Germany; commercial banking; Financial Markets; asset management; asset pricing; auto callable note; financial product; financial product development; financial product marketing; financial product launch; financial product positioning; Finance; Assets; Asset Pricing; Asset Management; Capital Markets; Financial Institutions; Banks and Banking; Commercial Banking; Financial Instruments; Annuities; Bonds; Stocks; Financial Management; Financial Markets; Financial Strategy; Interest Rates; Investment;


    Vallée, Boris, and Jérôme Lenhardt. "Deutsche Bank: Structured Retail Products." Harvard Business School Case 217-037, November 2016.  View Details
  3. Tableau

    Boris Vallee

    Matrix Capital Management, a long-short equity hedge fund based in Waltham, Massachusetts, is assessing its investment in Tableau, a data visualization company. Tableau, which conducted an IPO a few years ago, has been experiencing substantial growth as it aims at disrupting the business intelligence software market. Matrix's investment management team is attracted by two key features of the tech company: the large addressable market and the potential to emerge as a leader in this market. However, after hitting an all-time high in the first quarter of 2015, Tableau's share price began trading down, and by September of that year the stock was trading down year-to-date. Matrix's management team wonders whether the recent market volatility presents an opportunity to add to their existing long position. This case highlights a variety of methodologies to valuate a high-growth company in the tech sector and illustrates the challenge of living up to high market expectations.

    Keywords: technology; hedge fund; long-short equity; growth investing; valuation; Growth and Development Strategy; Valuation; Technology Industry; Waltham;


    Vallee, Boris. "Tableau." Harvard Business School Case 216-045, March 2016. (Revised December 2016.)  View Details