the uncertainty associated with the unique circumstances of a particular company, for example, the introduction of a superior technology, as it might affect the price of that company's securities
Corporate risk comes in many guises from the smallest of pitfalls, which at worst might cause an organization expense or embarrassment, to outright disasters - the result of which can be catastrophic. The article explains what measures can be taken to reduce and manage risk. The discussion advances to describing...
In the contemporary business era, risk management has assumed significance. The heightened level of business risk has made organizations realize the importance of having sound risk management systems in place. Today, the stakeholders, shareholders and policymakers alike, are interested in timely risk management information. They need the same for a...
Risk is a term that is bandied about almost casually in the financial media. This should come as no surprise. Risk and the management of risk are at the core of investment success. Without a solid understanding of risk and the principles for mitigating it, one might as well be...
Risk ranking is a common methodology for making risk based decisions without conducting quantitative risk analysis. The basis for risk ranking is the risk matrix that has both a consequence and frequency axis. The product of consequence and frequency provides a measure of risk. Each consequence /frequency pair on the...
More and more people say business is driving operational-risk management. As business continuity becomes a necessity and the market remains volatile, operational risk has become a key boardroom issue and while the regulatory push for operational risk may have initially been the driving force, business drivers and efficiency have taken...
In many cases, the payout from an insurance-linked security is tied to some stochastic variable, an index, which is correlated, but not identical, with the insured's actual losses. Therefore, such an instrument will usually not provide a perfect hedge. There will be some mismatch, the so-called basis risk. This paper...
This article talks about the types of risk and different measures to minimize these kind of risks. While investing for retirement, first impulse is to choose the "safest" investment for savings plan and after that measures that can help to make sure that money will be there for future. However,...
Today, management frequently comes up with questions on how one should handle a perceived risk. Marketing comes almost to every one of their promotions to see if there is anything out of the ordinary associated with it. According to this article managers need to discuss the future of risk management,...
Every risk offers a choice: the risk of action and the risk of inaction. If a risk is right, the real harm comes in letting the opportunity pass by. This paper offers suggestions for becoming more comfortable taking risks and how to push yourself to do so.
The article emphasizes that there are enhanced risk models, systems and methods designed to help organizations better manage their businesses and capitalize on the risk equation, rather than fall victim to its clutches. Leading financial institutions are now embarking on a quest to achieve increased shareholder value by linking risk...
This paper examines the two-way linkages between credit risk measurement and the macroeconomy. It first discusses the issue of whether credit risk is low or high in economic booms. It then reviews how macroeconomic considerations are incorporated into credit risk models and the risk measurement approach. It also suggests that...
This article is related to credit risk management. Credit risk is most simply defined as the potential that a bank borrower or counterpart will fail to meet its obligations in accordance with agreed terms. The goal of credit risk management is to maximize a bank’s risk-adjusted rate of return by...
In the financial world there is a conundrum with terrorism alternative risk transfer ART arising from the ambiguity in risk evaluation. An ART deal may be given a neat quantitative risk label but buyers may suspect that the real risk is quite different. Risk analysts need to convince potential ART...
Investors have begun to focus on risk dollars spent to achieve return. The increasing trend to focus on reward and risk at the instrument, manager and overall portfolio level has resulted in a need to ensure that compensation and fees encourage the type of risk-taking that the primary fiduciary desires....
In this paper, we explain how enterprise risk management creates value for shareholders. In contrast to the existing finance literature, we emphasize the organizational benefits of risk management. We show how a firm should choose its risk appetite and measure risk when implementing enterprise risk management. We also provide an...
Almost everything we do in nowadays' business world involves a risk of some kind: customer habits change, new competitors appear, and factors outside your control could delay your project. But formal risk analysis and risk management can help you to assess these risks and decide what actions to take to...
Risk is inevitable. But with the Insurance Institute of America's Associate in Risk Management ARM designation program, risk management professionals can gain the practical skills they need to understand risk and manage it well. ARM fully integrates the key elements of risk assessment, risk control and risk financing in a...
This paper provides an empirical analysis of the risk of trading revenues of U.S. commercial banks. This paper collects quarterly data on trading revenues, broken down by business line, as well as the Value at Risk-based market risk charge. The overall picture from these preliminary results is that there is...
This article explores the value proposition in terms of enterprise risk management ERM - with an important twist. Current ERM extends standard risk management strategies to a larger set of business risks, notably those of operations and project decisions - but generally focused on risk analysis as it affects available...
In recent years, a new type of financial instruments has appeared on financial markets. Even though they have all the features of financial contracts, they are very different from the classical structures. Their underlying risk is indeed related to a non-financial risk (natural catastrophe, weather event...), which may somehow be...
