Showing papers on "Financial risk published in 1988"

Financial Risk Management

Abstract: All of the Branch’s activities involve, to varying degrees, the analysis, evaluation, acceptance and management of risks or combinations of risks. An established risk governance framework and ownership structure ensures oversight of and accountability for the effective management of risk at Group, regional and global business levels. It also provides for the compliance with the Banking Act No 30 of 1988 as amended by the Banking Amendment Act No 33 of 1995, Directions, Determinations, and Circulars issued to Licensed Commercial Banks by the Central Bank of Sri Lanka. The Branch’s Risk Function consists of Wholesale & Market Risk & Retail Banking & Wealth Management (RBWM) Risk, Security & Fraud Risk, CRO & Administration which encapsulate Risk Strategy, Enterprise Wide Stress Testing and Operational Risk. The HSBC Group provides overall written policies and procedures on risk management covering specific areas such as credit risk, liquidity risk, market risk and operational risks. The local management through Executive Committee and Risk Management Committee monitor the execution of risk management policies and procedures.

A multi-index risk model of the japanese

Abstract: While a great deal of empirical work has been performed on identifying the risk structure (return generating process) for the New York Stock Exchange, little work has been done in identifying and understanding risk in the Japanese stock market. In this paper, we use new statistical techniques to identity the risk structure of Japanese stocks. The risk structure we find is more complex than that in American markets and more clearly calls for the identification of more than one risk index. The identified risk structure is tested in a forecast mode and found to be relatively stable over time. The association between the risk structure and macro-economic variables is investigated.

Diversification, Capital Structure, and Systematic Risk: An Empirical Investigation:

Abstract: This study uses theoretical considerations to empirically examine the effects of various diversification strategies on the capital structure of firms and on the systematic risk It documents that firms reduce their operating risk by diversification and increase financial leverage to take advantage of tax benefits A cross-sectional path analysis is employed to show that firms trade off the reduction in operating risk due to diversification with increased financial leverage, and thus the systematic risk remains the same

Multinational Risk Assessment and Management: Strategies for Investment and Marketing Decisions

Abstract: Part I: Existing Approaches to Political Risk Assessment Part II: Host-Country Dynamics: Policy, Technological, and Financial Risks Part III: Entry-Management Systems and Market-Entry Strategies Part IV: International Investment-Risk Analysis Part V: Corporate-Risk Assessment Part VI: Risk-Rating and Forecasting Services Part VII: Defensive Risk Management Part VIII: Prospects for Risk Assessment and Management: An Integrative Approach

Chance-Constrained Financing as a Response to Financial Risk

Abstract: The results of a recent survey suggest that many decision makers view financial risk in a safety-first context. Imposing safety-first chance constraints on potential financial ratios or flows can be difficult with traditional methods. This is particularly true with financial ratios when both the numerator and denominator are random and are affected by endogenous decisions. A model and numerical example are presented which enforce probabilistic or chance constraints upon potential debt/asset ratios in a multiperiod linear program. The model can be easily modified to probabilistically constrain alternative financial performance measures such as current ratios, working ratios, or cash flows.

Financial deregulation and the globalization of capital markets

Abstract: Financial deregulation in recent years has vastly increased the ability of the financial markets to allocate international capital efficiently. It has also sparked explosive growth in financial transactions and resulted in a restructured, more competitive, and less costly financial services industry. But the deregulation has proceeded so rapidly that the volume of purely financial transactions now greatly exceeds that of transactions driven by international trade in goods and services. This new pattern has led to growing economic uncertainty and instability. Markets now run around the clock and respond to change so rapidly that there is a growing danger of chain reactions that could precipitate global market failure. Regulators in the major trading nations need to address the possibility of a full-scale breakdown of the financial system.

Avoid the Seven Deadly Sins of Strategic Risk Analysis

Abstract: Evaluating a business‐unit strategy from the perspective of creating shareholder value involves discounting the future cash flows that the strategy is expected to generate by the minimum rate of return required by investors. The resulting net present value (NPV) can then be compared with those for alternative strategies to determine which is expected to create the most value for shareholders. Strategies with negative NPVs are those that fail to provide investors with sufficient returns to compensate them for their investment risk.

Relationship of Pooling to Equity Capital and Current Assets of Large Producer Marketing Cooperatives

Abstract: Committed marketing cooperatives have ensured member support and because of pooling may have higher leverage relative to buy-sell cooperatives. The hypothesis tested in this article is that marketing cooperatives with pooling have less market risk compared with those without pools and as a consequence can incur more financial risk and command greater leverage. Using an econometric approach to control for size of cooperative, empirical results suggest that pooling cooperatives have increased leverage, about 9 percent more than nonpooling cooperatives.

Industrial portfolio responses to macroeconomic shocks : an econometric model for developing countries

Abstract: This study identifies the macro conditions under which industrial growth and financial stability are most likely, and those conditions which are most prone to create disaster. The paper models interest rates, exchange rates, and aggregate demand conditions as affecting industrial growth and financial risk through two channels. First, because these variables affect firms' income, they affect firms net worth expansion. Second, because the link between macro variables and income depends upon the proportions in which firms hold fixed capital, inventories, financial assets, and debts, changes in macro variables also induce portfolio adjustments. The paper then develops an empirical model which allows one to calibrate the strength and timing of each effect. The paper is composed of two sections; one to develop the model, and one to report an application to Uruguayan data. There is also a brief summary section.

Macroeconomic Uncertainty as a Corporate Policy Issue

Abstract: The turbulence of the world economy generates both risks and opportunities for a corporation operating in the international market. The company has to face at least four types of risks, i.e., country risks, foreign exchange risks, financial risks and commercial risks. All these risks can, however, be considered as different expressions of the same macroeconomic imbalance. What the company needs is an integrated and efficient policy for the management of all types of risks and opportunities rooted in macroeconomic disturbances.