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The Independent Online
City University Business School should be congratulated on its sense of timing. Its new professor of banking and finance is an expert on regulation of financial markets, competition in banking and the causes of bank failure - all three of which have rarely been out of the news in recent months.

In fact, though, the interests of Shelagh Heffernan - the school's first female professor - go somewhat further than the merely topical.

An apparently prolific publisher of papers and books, she has, for instance, just delivered the manuscript of a tome to be called Modern Banking in Theory and Practice, which is evidently as big as it sounds. She has also published Sovereign Risk Analysis and Modern International Economics as well as contributing to journals and other publications, such as the encyclopaedia for which she is now completing two entries.

Professor Heffeman, 39, has been at City University for 13 years, the past few as director of the BSc course in banking and international finance. But before settling in London she led something of a peripatetic existence.

A first degree in her native Canada was followed by scholarships to Oxford, where she completed an MPhil and a doctorate. Since then, she has taught at the University of British Columbia and been a visiting professor at Queen's University and York University, Toronto and is currently a research associate at New York University's Centre for Japanese-US Business and Economic Studies.

But to return to those subjects of topical interest, why do banks fail? According to Professor Heffeman, who took up her position yesterday, it is not generally new products such as derivatives that bring them down. Instead, it is more likely to be profitability problems associated with the poor quality of loans.

"It is quite rare to see a bank fail through outright fraud or misuse of new instruments," she says.

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