Topic
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.
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TL;DR: In this paper, the authors test whether the frequency of feedback information about the performance of an investment portfolio and the flexibility with which the investor can change it influence her risk attitude in markets.
Abstract: We test whether the frequency of feedback information about the performance of an investment portfolio and the flexibility with which the investor can change it influence her risk attitude in markets.In line with the prediction of Myopic Loss Aversion (Benartzi and Thaler, 1995), we find that more information and more flexibility result in less risk taking.Market prices of risky assets are significantly higher if feedback frequency and decision flexibility are reduced.This result supports the findings from individual decision making, and shows that markets do not eliminate such behavior.
203 citations
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TL;DR: This paper proposed a new approach to improve the way central banks can analyze and manage the financial risks of a national economy based on the modern theory and practice of contingent claims analysis (CCA), which is successfully used at the level of individual banks by managers, investors and regulators.
Abstract: This paper proposes a new approach to improve the way central banks can analyze and manage the financial risks of a national economy It is based on the modern theory and practice of contingent claims analysis (CCA), which is successfully used today at the level of individual banks by managers, investors, and regulators The basic analytical tool is the risk-adjusted balance sheet, which shows the sensitivity of the enterprise's assets and liabilities to external "shocks" At the national level, the sectors of an economy are viewed as interconnected portfolios of assets, liabilities, and guarantees -- some explicit and others implicit Traditional approaches have difficulty analyzing how risks can accumulate gradually and then suddenly erupt in a full-blown crisis The CCA approach is well-suited to capturing such "non-linearities" and to quantifying the effects of asset-liability mismatches within and across institutions Risk-adjusted CCA balance sheets facilitate simulations and stress testing to evaluate the potential impact of policies to manage systemic risk
203 citations
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TL;DR: There's some risk aversion at play in cybersecurity; risk aversion is why a General Counsel will say that if you might have lost data, then you have to act as if you did lose it.
Abstract: There's some risk aversion at play in cybersecurity; risk aversion is why a General Counsel will say that if you might have lost data, then you have to act as if you did lose it. Risk aversion is why some firms (and some people) keep no records. We're living in a time when legislatures want to force risk reductions in cyberspace. It's altogether likely that any legislature that acts will do so by setting up some sort of agency to oversee the process of risk reduction in cyberspace. Risk reduction agencies are purposefully risk averse and immortal, which guarantees that their enforcement power inevitably demands diseconomic risk reductions.
202 citations
TL;DR: In this article, the authors report the results of a questionnaire survey addressed to CEOs of Fortune 500 companies concerning incentive practices for venture managers, and report that most companies are not providing different incentives for managing venture managers than for other managers.
200 citations
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27 May 2010
TL;DR: In this paper, the authors discuss the nature of financial risk, value-at-risk capital, dynamic hedging, asset-liability management, and Securitisation and the financial system.
Abstract: 1. Nature of Financial Risk 2. Value-at-Risk Capital 3. Boom and Bust Driven by Value-at-Risk 4. Dynamic Hedging 5. Asset-Liability Management 6. Financial System 7. Lending Booms 8. The Case of Northern Rock 9. Securitisation and the Financial System 10. A Fresh Start
196 citations