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Summer reading – some recommendations from our editorial team

BNP Paribas Asset Management

Covering Germany and Europe, adaptive markets, a note from the Fed and more

Summer is here and the time is right for catching up on the reading of all those books you’ve heard about or perhaps even bought, but never had the time to actually read.

Here are our recommendations of some books that could help you better understand some of the factors that may be driving asset markets (this list is in no particular order):


Berlin Rules: Europe and the German Way by Paul Lever, published March 2017

Sir Paul Lever, the author of this book, was British ambassador to Germany from 1997 to 2003. He has written a very readable account of Germany’s role in Europe. Of particular interest are the explanations on how the structure and decision-making processes of the European Union reflect Germany’s own.

Although written before last autumn’s Federal elections that eventually led to Angela Merkel’s fourth term as German chancellor, the book is in no way outdated. The analysis of how the EU may develop in coming years remains pertinent in providing markers to look out for in coming months as decisons are made about Europe’s future orientations.


Adaptive markets: Financial Evolution at the Speed of Thought, by Andrew W. Lo, published 2017

I have to admit this weighty tome (483 pages) has sat on the bookshelf for the last year. This summer is the time to get to grips with it.

Andrew W. Lo is a Professor at the MIT Sloan School of Management and director of the MIT Laboratory for Financial Engineering. He is a prolific writer  and you can find comprehensive information on his books and media articles here:

Adaptive markets is a contribution to “one of the biggest debates in finance”, namely the question of whether investors and markets are rational and efficient, as modern financial theory assumes, or irrational and inefficient as behavioural economists believe – and various financial bubbles, crashes and crises suggest.

The adaptive markets hypothesis, advanced in the book, is a framework proposed by Andrew Lo in which rationality and irrationality co-exist. It draws on numerous disciplines (including evolutionary biology, neuroscience and artificial intelligence) in seeking to complete the gaps in the theory of market efficiency.


From the website of the Federal Reserve: a note entitled ‘(Don’t Fear) The Yield Curve’ by Eric Engstrom and Steven Sharpe

Recent flattening of the US yield curve has led to much discussion because in the past, when the gap between short-dated  and 10-year Treasury yields has fallen below zero – or inverted – a recession has followed within 12-24 months.

This brief note outlines a measure for predicting recessions that purports to improve on the traditional approach of looking at the 3-month – 10-year yield spread.

Steve Friedman, our senior US economist, highlights it because it was shared with the members of the Federal Open Markets Committee (FOMC) at their last meeting as they wrestle with the question of whether the slope of the yield curve signals a near-term recession. And the message the FOMC appears to have taken from the research is that this new measure is not at a particularly alarming level in terms of a recession signal over the next year.


And finally, when you need a rest from the books:

British Prime Ministers and Europe

If all this reading is too much for you, how about a video or a podcast? On the website of the University of Oxford is a series of lectures on the relationship with Europe of each British prime minister since Margaret Thatcher. These lectures were recorded in autumn 2017. They provide fascinating insights into the evolution of the UK’s relationship with and attitude towards Europe.

A series of videos available at

Summer reading

On the same subject:

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