Craig Furfine
Craig Furfine

Clinical Professor of Finance

Print Overview

Craig Furfine is a Clinical Professor of Finance.

Furfine studies the functioning of interbank markets, securitization, and real estate finance, having published in scholarly journals including the Review of Corporate Finance Studies, the Journal of Business, the Journal of Monetary Economics and the Journal of Money, Credit, and Banking. He currently serves as an Associate Editor of the Journal of Money, Credit, and Banking. Prior to joining the Kellogg School faculty, he was an economic advisor in the economic research department at the Federal Reserve Bank of Chicago where he served as economics editor of the Bank's quarterly research publication. He was a senior economist at the Bank for International Settlements in Basel where he contributed to the revision of international bank capital standards. Before that, he was an economist at the Board of Governors of the Federal Reserve System, where he served on international work groups responsible for analyzing various payment system issues. Furfine teaches corporate finance and multiple courses in real estate finance. He received a PhD in economics from Stanford University.


Areas of Expertise
Banking and Financial Institutions
Corporate Finance
Financial Engineering
Fixed Income Securities and Markets (Includes: Money Markets, Government Debt and Securities)
Real Estate
Real Estate Finance
Regulation of Financial Markets

Print Vita
PhD, 1995, Economics, Stanford University, Stanford, California
MA, 1993, Economics, Stanford University, Stanford, California
BA, 1990, Economics, University of California, Berkeley, California, highest departmental honors

Academic Positions
Clinical Professor, Finance, Kellogg School of Management, Northwestern University, 2008-present
Visiting Associate Professor of Finance, Kellogg School of Management, Northwestern University, 2007-2008

Other Professional Experience
Economic Advisor, Federal Reserve Bank of Chicago, 2002-2008
Senior Economist, Bank for International Settlements, 1998-2002
Economist, Federal Reserve Board of Governors, 1995-1998

Editorial Positions
Associate Editor, Journal of Money, Credit and Banking, 2011-Present

Print Research
Research Interests

Commercial real estate finance; securitization; commercial and residential mortgages; interbank markets

Furfine, Craig. 2014. Complexity and Loan Performance: Evidence from the Securitization of Commercial Mortgages. Review of Corporate Finance Studies. 2(2): 154-187.
Furfine, Craig and Richard J. Rosen. 2011. Mergers Increase Default Risk. Journal of Corporate Finance. 17(4): 832-849.
Furfine, Craig. 2007. When is Inter-Transaction Time Informative?. Journal of Empirical Finance. 14(3): 310-332.
Furfine, Craig. 2006. The Costs and Benefits of Moral Suasion: Evidence from the Creditors of Long-Term Capital Management. Journal of Business. 79(2): 593-622.
Amato, Jeffery and Craig Furfine. 2004. Are Credit Ratings Procyclical?. Journal of Banking and Finance. 28(11): 2641-2677.
Furfine, Craig. 2004. Public Disclosures and Calendar-Related Movements in Risk Premiums: Evidence from Interbank Lending. Journal of Financial Markets. 7(1): 97-116.
Furfine, Craig. 2003. Standing Facilities and interbank borrowing: Evidence from the Fed's new discount window. International Finance. 6(3): 329-347.
Furfine, Craig. 2003. Interbank Exposures: Quantifying the Risk of Contagion. Journal of Money, Credit and Banking. 35(1): 111-128.
Furfine, Craig. 2002. Interbank Markets in a Crisis. European Economic Review. 46(4-5): 809-820.
Furfine, Craig. 2001. Bank Portfolio Allocation: The Impact of Capital Requirements, Regulatory Monitoring, and Economic Conditions. Journal of Financial Services Research. 20(1): 33-56.
Furfine, Craig. 2001. The Reluctance to Borrow from the Fed. Economics Letters. 72(2): 209-213.
Furfine, Craig. 2001. Banks Monitoring Banks: Evidence from the Overnight Federal Funds Market. Journal of Business. 74(1): 33-58.
Reprinted in:
Liquidity and Crisis, edited by Franklin Allen, Elena Carletti, Jan Pieter Krahnen, and Marcel Tyrell, vol. 74, Oxford, U.K.: Oxford University Press, 2011.
Furfine, Craig. 2000. Interbank Payments and the Daily Federal Funds Market. Journal of Monetary Economics. 46(2): 535-553.
Furfine, Craig. 1999. The Microstructure of the Federal Funds Market. Financial Markets, Institutions, and Instruments. 8(5): 24-44.
Furfine, Craig and Jeff Stehm. 1998. Analyzing Alternative Intraday Credit Policies in Real-Time Gross Settlement Systems. Journal of Money, Credit and Banking. 30(4): 832-848.
Furfine, Craig. 2015. Betting on Failure: Profiting from Defaults on Subprime Mortgages. Case 5-312-504 (KEL879).
Furfine, Craig. 2014. The Search for Property: Institutional Investment in Real Estate. Case 5-413-750 (KEL824).
Furfine, Craig. 2012. Working at Workouts: Commercial Real Estate Debt in Distress. Case 5-411-754 (KEL697).
Furfine, Craig. 2014. Business as Unusual: Managing Commercial Property in Distress. Case 5-413-759 (KEL857).
Furfine, Craig. 2011. Wildcat Capital Investors: Real Estate Private Equity. Case 5-310-510 (KEL553).
Furfine, Craig and Mitchell A. Petersen. 2014. The Right of Acquisition: Options in Commercial Real Estate. Case 5-114-001 (KEL819).
Furfine, Craig, Sara Lo and Daniel Kamerling. 2011. Golden Opportunity: Commercial Real Estate Valuation. Case 5-311-507 (KEL595).
Furfine, Craig. 2014. Back to School: Real Estate Development of Off-Campus Student Housing. Case 5-313-511 (KEL854).
Furfine, Craig and Mike Fishbein. 2013. The Return of the Loan: Commercial Mortgage Investing after the 2008 Financial Crisis. Case 5-113-005 (KEL757).

Print Teaching
Teaching Interests

Real estate finance; corporate finance

Full-Time / Part-Time MBA
Finance I (FINC-430-0)

Finance 1 covers managers' and investors' most fundamental finance decision: how to value a project or an asset. Managers must determine the value of building a factory, entering a new market, or purchasing an entire firm when deciding in which projects to invest. Similarly, individuals must assess the value of financial securities to decide how to invest their wealth. Using a combination of lectures and business cases, Finance 1 teaches the three principal methods for valuing projects or assets: discounted cash flow, multiples, and real options. These valuation tools lay the foundation for all work in capital markets and corporate finance.

Prerequisite: Business Analytics I (DECS-430)

Recommended Prerequisite: Business Analytics II (DECS-431) and Accounting for Decision Making (ACCT-430), which may be taken concurrently.

Real Estate Finance and Investments (FINC-454-0)
This course is an introduction to the most fundamental concepts, principles, analytical methods and tools useful for making investment and finance decisions regarding commercial real estate assets. We begin the course by considering investment in fully operational income properties. Later, the course takes a close look at real estate capital structure and operating companies. The course concludes with an examination of commercial real estate financing, with an emphasis on public and private mortgage markets. We will study commercial real estate using the tools and framework of modern corporate finance and investments, while focusing on the institutional features unique to the real estate industry. The course provides the intuitive and analytical underpinnings of property valuation, deal structuring, and debt pricing. As such, it is useful for students with industry experience as well as students without a real estate background who may be interested in learning more about real estate as an asset class or those who are contemplating making future real estate investments, both personally and professionally.

Applied Real Estate Finance and Investments (FINC-455-0)
This course uses case studies to augment student understanding of investment and financing decisions in the commercial real estate industry. This course builds on the foundational course, Real Estate Finance and Investments (FINC 454) in three ways. First, it explores additional topics relevant to commercial real estate, including valuing land held for commercial development and the allocation and investment decisions made by institutional investors into real estate assets. Second, it adds additional depth to topics introduced in the foundational course with a closer examination of mortgage backed securities. Finally the course introduces multi-faceted real estate decision making by examining issues involving simultaneous consideration of the concepts taught in both FINC-454 and FINC-455.

Executive MBA
Real Estate Finance (FINCX-455-0)
This course is an introduction to the most fundamental concepts, principles, analytical methods and tools useful for making investment and finance decisions regarding commercial real estate assets. The course will consider investment in fully operational income properties, with a particular focus on how a property’s financing affects the risks and returns of its investors. We will study real estate investment using the tools and framework of modern corporate finance and investments, while focusing on the institutional features unique to the real estate industry.