In Financial Darwinism, author Leo Tilman lays the groundwork for understanding the new financial order by introducing his evolutionary thesis and then outlines an actionable decision-making framework that enables financial institutions and investors to fully leverage the power of business strategy, corporate finance, investment analysis, and risk management. Financial Darwinism is an invaluable road map to today's financial world and an essential guide to surviving and thriving during these challenging times.

In Financial Darwinism, author Leo Tilman lays the groundwork for understanding the new financial order by introducing his evolutionary thesis and then outlines an actionable decision-making framework that enables financial institutions and investors to fully leverage the power of business strategy, corporate finance, investment analysis, and risk management. Financial Darwinism is an invaluable road map to today's financial world and an essential guide to surviving and thriving during these challenging times.

Foreword ixPreface xvAcknowledgments xixCHAPTER 1 Understanding and Navigating the Financial Revolution 1Introduction: The Need for Transformational Thinking 1From George Bailey to the Golden Age 5Accounting for Profits the Old-Fashioned Way 7The "Great Moderation" As an Evolutionary Catalyst 11Economic Performance in the Dynamic New World 14Pressures on Static Business Models 18Dynamic Finance Perspective on Financial Crises 21Pillars of Strategic Decision Making 25Value Creation Through Dynamism and Business Model Transformations 26Beyond the Facade: The Importance of Risk-Based Transparency 35CHAPTER 2 The Old Regime and Its Demise 39Economic Performance and Viability of Financial Institutions 39Static Business Models 41Dominant Forces: The Future that Has Already Happened 46Pressures on Static Business Models 55CHAPTER 3 The Dynamic New World 65Risk-Based Economic Performance 65Balance Sheet Arbitrage 68Principal Investments 69Systematic Risk Exposures 71Fees and Expenses 74Capital Structure Optimization 75Economic Performance Attribution 75CHAPTER 4 Business Model Transformations 79Pillars of Strategic Decisions in a Dynamic World 79Responsive Recalibrations of Business Models 81Full-Scale Business Model Transformations 86Making the Strategic Vision a Reality 93CHAPTER 5 The Road to Financial Darwinism 99Real-World Business Model Transformations 99Stakeholder Communication & Equity Valuation in a Dynamic World 109Economic Value Creation (and Destruction) by Non-Financial Corporations 112The Infamous "Carry Trade" and the Old Ways of Thinking 115A Dynamic Finance Perspective on Modern Financial Crises 118Beyond the Facade: The Need for Risk-Based Transparency 127Conclusion 129Epilogue: Financial Darwinism and the Crisis of 2007-2008 133Appendix A: The Risk-Based Economic Performance Equation 137Appenidx B: A Case Study in Dynamic Finance 141Notes 157References 163About the Author 167Index 169