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.

Auditor Risk Assessment: Insights from the Academic Literature

Abstract: To contribute to the PCAOB project on risk assessment in financial statement audits, we draw on the academic literature to offer insights and conclusions on the risk‐assessment process. We use the PCAOB's (2005) recent briefing paper on risk assessment as the organizing framework for our literature review, and we examine academic auditing literature addressing topics including business risk, inherent risk, control risk, fraud risk, linking risk assessments to subsequent testing, and the audit risk model. Overall, we believe that the results of academic research are consistent with the PCAOB staff's apparent reconsideration of the auditor's risk‐assessment process. We conclude with identification of future research topics and recognition of barriers to performing research that is relevant to standard setters.

Evaluating credit risk models

Abstract: Over the past decade, commercial banks have devoted many resources to developing internal models to better quantify their financial risks and assign economic capital. These eAorts have been recognized and encouraged by bank regulators. Recently, banks have extended these eAorts into the field of credit risk modeling. However, an important question for both banks and their regulators is evaluating the accuracy of a model’s forecasts of credit losses, especially given the small number of available forecasts due to their typically long planning horizons. Using a panel data approach, we propose evaluation methods for credit risk models based on cross-sectional simulation. Specifically, models are evaluated not only on their forecasts over time, but also on their forecasts at a given point in time for simulated credit portfolios. Once the forecasts corresponding to these portfolios are generated, they can be evaluated using various statistical methods. ” 2000 Elsevier Science B.V. All rights reserved.

Risk Aversion and Religion

Abstract: We use a dataset for a demographically representative sample of the Dutch population that contains a revealed preference risk attitude measure, as well as detailed information about participants’ religious background, to study three issues. First, we find strong confirmatory evidence that more religious people, as measured by church membership or attendance, are more risk averse with regard to financial risks. Second, we obtain some evidence that Protestants are more risk averse than Catholics in such tasks. Third, our data suggest that the link between risk aversion and religion is driven by social aspects of church membership, rather than by religious beliefs themselves.

Measurement of bank performance in greece

Abstract: During the last few years, the Second Banking Directive has set out the principles of banking in the single European financial market and provided equal competitive conditions for all European banking institutions. Thus, banks have been forced to be more competitive and to implement bank rating systems to evaluate their financial risks. The present study evaluates the performance and efficiency of the commercial and cooperative banks in Greece for the period 2003-2004. Moreover, the Greek banks are rated based on their performance. The ranking result can be used to analyse the strengths and weaknesses of a bank compared to its competitors and it can serve as a basis for the construction of a rating system for Greek banks. The results obtained indicate that commercial banks are tending to increase their accounts, to attract more customers and ameliorate their financial indices, thereby becoming more competitive and maximizing their profits. Concerning the cooperative banks in Greece, the conclusions are not so uniform, since there are banks that are enjoying considerably increased profits and market shares, and others whose financial indices seem to be deteriorating.

Renewable energy investment risk evaluation model based on system dynamics

Abstract: China currently faces the dual constraints of developing low-carbon economy and enabling sustainable energy utilization. It is an inevitable choice for the strategic transformation of economy development and energy development in China to develop renewable energy. Since renewable energy is a capital-and tech-intensive industry, which requires a large amount of investment and a high level of technology innovation. Investors face many different uncertainties when making a renewable energy project investment decision. Therefore, it has great significance for the development of renewable energy to evaluate the risks in renewable energy investment projects, and then make the best investment decisions. Based on above background, the topic of renewable energy investment risk is studied in this paper using system dynamics method. In the first part of the work, three main risks in renewable energy investment, technical risk, policy risk and market risk, have been discussed, and then causal loop diagram of investment risk and risk assessment model have been established by the system dynamics method, after that a numerical example was given in the last part of the paper. The result of the numerical example indicated that policy risk was the main factor affecting the investment in the early development stage, while policy risk and technology risk decline gradually, market risk has gradually become the main uncertainty affecting the investment in the mature development stage.