Financial risk

About: Financial risk is a research topic. Over the lifetime, 11899 publications have been published within this topic receiving 231404 citations. The topic is also known as: economic risk.

The Need for Special Resolution Regimes for Financial Institutions - The Case of Theeuropean Union

Abstract: The global financial crisis has demonstrated weaknesses in resolution regimes for financial institutions around the globe, including in the European Union (EU). This paper considers the principles underlying resolution regimes for financial institutions, and draws out how a well-designed resolution regime can expand the toolset available for crisis management. Introducing, or in some cases expanding the scope, of these regimes is pressing to achieve more effective responses to ongoing financial sector weaknesses across the EU.

Techniques of Financial Analysis; A Guide to Value Creation

Abstract: A systems context for financial management managing operating funds assessment of business performance projection of financial requirements dynamics and growth of the business system cash flows an dthe time value of money nanalysis of investment decisions cost of capital and business decisions analysis of financial choices valuaiton and business performance managing for shareholder value. Appendices: financial analysis using financial genome glossary of key terms and concepts financial informaiton and on-line sources basic inflation concepts some issues in multinational financial analysis solutions to self-study exercises and problems, with questions for discussion.

Historic performance-based distribution system risk assessment

Abstract: Regulatory authorities are increasingly adopting performance-based regulation (PBR) in the deregulated electricity industry. A PBR regime is intended to provide distribution utilities with incentives for economic efficiency gains. In order to discourage distribution utilities from sacrificing service reliability while pursuing economic incentives, historic utility performance is utilized as the specified service reliability standard in some places. A reward/penalty structure based on the historic reliability record could be integrated into a PBR plan. Historic reliability data are therefore, extremely important for distribution system risk assessment and remedial work in this new regime. This paper presents actual reliability data taken from the Canadian Electricity Association (CEA) Service Continuity Reports. The financial risk analyzes associated with the historic reliability data are conducted by incorporating reliability index probability distributions in imposed reward/penalty policies. The major cause contributions to the service continuity indices utilizing the CEA cause code categories are analyzed and illustrated. This work should prove useful for those utilities facing the emerging application of PBR.

The Effects of Price Risk on Housing Demand: Empirical Evidence from U.S. Markets

Abstract: This article examines how price risk affects housing demand. It identifies two relevant channels: a financial risk effect that reduces demand, and a hedging effect that increases demand since current homes may hedge future housing costs. The latter dominates when hedging incentives are strong, namely when the likelihood of moving up the housing ladder is high and the tendency to move across markets is low. For households with weak hedging incentives, the article finds negative effects of price risk on the timing and size of home purchases, but positive effects for households with strong hedging incentives.

Illegal Sports Bookmakers

Abstract: This paper provides an economic analysis of illegal sports bookmaking using detailed records from six bookmakers who operated in the 1990s. These operations are structured like standard firms and utilize incentive contracts to induce appropriate employee behavior. The bookmakers oer prices which closely follow the geographically separated legal market, but larger operations price discriminate based on individual betting patterns. Despite the availability of inexpensive hedging instruments, all operations take on substantial financial risk. This implies the bookmakers cannot be risk-averse and must hold large cash reserves. The risk-adjusted profit rate is lower than in legal financial markets. These results and behaviors are consistent with standard models of economic self-interest.