Richard L. Sandor is an American businessman, economist, and entrepreneur. He is chairman and CEO of the American Financial Exchange (AFX) established in 2015, which is an electronic exchange for direct interbank/financial institution lending and borrowing. The AFX flagship product, the AMERIBOR benchmark index, reflects the actual borrowing costs of thousands of regional and community banks across the U.S. and is one of the short-term borrowing rates, along with the Secured Overnight Financing Rate, vying to replace U.S. dollar Libor as a benchmark in the U.S.
Sandor is chairman and CEO of Environmental Financial Products LLC, which specializes in inventing, designing and developing new financial markets with a special emphasis on investment advisory services. He is widely recognized as the "father of financial futures" for his pioneering work in developing the first interest rate futures contract in the 1970s, when he served as chief economist and vice president of the Chicago Board of Trade (CBOT).
Sandor is also the founder of the Chicago Climate Exchange (CCX) – the world's first exchange to facilitate the reduction and trading of all six greenhouse gases. In 2007, he was named the "father of carbon trading" by Time Magazine for his work in designing, developing and launching CCX and affiliated exchanges. Among Sandor's academic roles, he is currently the Aaron Director Lecturer in Law and Economics at the University of Chicago Law School and an honorary Professor at the University of Hong Kong and the School of Economics at Fudan University. He formerly taught at graduate and undergraduate levels at several universities throughout California, Illinois, New York, China and England.
On February 7, 2013, the University of Chicago Law School announced that Sandor and his wife Ellen R. Sandor are the principal donors to a $10 million endowment in law and economics at the University of Chicago Law School. The Sandors made the gift in honor of Sandor's mentor, Nobel Laureate Ronald Coase, Clifton R. Musser Professor Emeritus of Economics at the Law School. In their honor, the Institute for Law and Economics has been renamed the Coase-Sandor Institute for Law and Economics.
Sandor is known for asserting that the next financial revolution will be in the convergence of the financial markets and the environment. He is often credited for founding the field of environmental Finance. His first book Good Derivatives: A Story of Financial and Environmental Innovation, was published by John Wiley & Sons in April 2012.
Early life
Sandor received his Bachelor of Arts degree from Brooklyn College and holds a Ph.D. in economics from the University of Minnesota.
The Father of Financial Futures
As a professor on sabbatical from the University of California, Berkeley in the 1970s, Sandor became the chief economist and vice president of the Chicago Board of Trade (CBOT). At the CBOT, Sandor not only pioneered the first interest rate futures contract, but the most widely traded and imitated interest-rate futures in the world, the Treasury bond futures contract. This revolutionized the field of finance and earned him the title of "father of financial futures." Sandor originally coined the term "derivatives" to describe the futures and options contracts that were traded on the Chicago exchanges. Its definition was subsequently expanded to include not only regulated products on futures transactions, but any customized product traded off the exchange, i.e. bilateral OTC transactions. Sandor was honored by the CBOT and the City of Chicago in 1992 for the creation of financial futures.
Sandor was also a strong proponent of electronic trading at a time when most exchanges favored open-outcry. In fact, he had presented the case and designed the platform for electronic trading as early as 1970 – even before the concept of electronic trading was patented. At Berkeley, he was the project leader of the California Commodity Research Project (CCARP), which looked at the feasibility of establishing a for-profit, all-electronic exchange in at the time when none existed.
At the CBOT, Sandor championed innovative financial instruments such as event-linked derivatives. Sandor served as vice chairman of the CBOT Insurance Committee and was the originator and co-author of the catastrophe and crop insurance futures and options contracts.