Book Description
Risk management is no longer confined solely to risk management specialists. Stakeholders ranging from employees to investors must understand how to quantify the tradeoffs of risk against the potential return. The failure to understand the essential nature of risk can have devastating consequences.
Globally renowned risk and corporate governance experts Michel Crouhy, Dan Galai, and Robert Mark have updated and streamlined their bestselling professional reference Risk Management to introduce you to the world of risk management without requiring you to know the intricate formulas and mathematical details.
The Essentials of Risk Management is the first book to make even the most sophisticated risk management approaches simultaneously accessible to both risk and non risk professionals. It will help you to:
- Increase the transparency of your risk management program to satisfy shareholders, employees, regulators, and other important constituencies
- Keep on top of the continuing evolution of best-practice risk policies and methodologies and associated risk infrastructures
- Implement and efficiently communicate an organization-wide Enterprise Risk Management (ERM) approach that encompasses market, credit, liquidity, operational, legal and regulatory, business, strategic and reputation risks
- Navigate thorny areas including risk policies, risk methodologies, economic capital, regulatory capital, performance measurement, asset-liability management, and more
- Efficiently allocate limited corporate resources to comply with the new generation of risk regulation and corporate governance regulation
As a non-risk professional or board member, you are being called on more than ever before to make sophisticated assessments of your organization's risk exposures as well as play a critical role in its formal risk management process. The Essentials of Risk Management tells you what you need to know to succeed in this challenging new environment.
Customer Reviews:
Good Introduction.......2007-08-01
I would highly recommend this book to the begginer/budding Risk Manager
For the experienced risk professional, this is a bit too fundamental.
An excellent introduction.......2006-07-11
This book provides an introduction to the field of risk management for readers who do not yet want to get deeply involved in the mathematical formalism that is typically used. The authors wrote the book so that it is "accessible to everyone", and they have done a fine job. Those readers who need a more quantitative treatment will have to consult another book or the vast research literature on the subject. Risk management, as they see it, is an attempt to estimate both the `expected' losses and the `unexpected' losses, and being able to differentiate between these two concepts goes to the core of the subject. Thus the book emphasizes the "intuition" behind risk management, and not the formalism. However, one must not conclude from this that "intuition" and "formalism" are distinct, and the belief that they are has resulted in a lot of confusion (and financial losses) in recent years. The authors clearly do not believe that they are, but have merely emphasized "intuition" from a pedagogical point of view.
The authors classify risk into eight categories, namely market, credit, liquidity, operational, legal and regulatory, business, strategic, and reputation risk. Financial risk, as they see it, is composed of two of these, namely market and credit risk. Their discussion of corporate risk management is very interesting, in that it begins with the observation first made almost forty years ago that the value of a firm is not altered solely by financial transactions. This is due to their assumption of the perfect market hypothesis, which effectively suppresses the ability of the firm to gain significant advantages over an individual investor. Therefore with this assumption a firm should not concern itself with risks outside of the ones that all other firms face. This is an interesting conclusion, particularly in the context of using hedging via derivatives, as it implies that it cannot compete with ordinary self-insurance, due to the presence of transaction costs. The authors discuss in fair detail why the perfect market assumption is faulty, and therefore why managing risk with hedging is a viable strategy.
The regulatory environment, particularly in the banking industry, has enormous ramifications for risk management, as the authors discuss in the book. This is due in part to the Basel Accords of 1988 and 1996, and Basel II which is due to be in place at the end of 2007. The Basel accords are essentially a standardization for capital reserves, defining a `assets-to-capital' multiple and a `risk-based capital' ratio. The authors review the 1988 Accord and discuss the elementary relationships involved, including the `Cooke ratio' and how to obtain the credit equivalent for the off-balance-sheet exposures. They also discuss the reasons for the 1996 amendment, which essentially were the result of the new trading activities that banks were indulging themselves in. It would have been interesting if the authors had included a (historical) discussion on the efficacy of the Basel Accords in suppressing banking failures. They do mention the fiasco with Barings Bank, claiming that its demise would have been adverted if it were prohibited from racking up huge exchange-traded futures positions. This is certainly true, but any regulation needs to be validated by historical data, to the extent that this is possible, and this requires of course tracking of the financial institutions that are under the umbrella of the regulation. In this regard though, the authors do view bank regulation as a `research lab' for risk management, implying that they are aware of the need for validation of any regulations that are actually put in place. It will be fascinating therefore to see the impact of the new Basel II accords when they become active, and indeed observe, if possible, any `regulatory arbitrage' that occurs. This also brings up the question of how to assess the quality of the risk management strategies of a particular financial institution. The authors spend a little time discussing this, with one of them referring to a method analogous to credit scoring.
No book on risk management could be complete without discussion of academic research on the topic, for the reason that much of this research has found practical application and has greatly influenced portfolio management and risk valuation. The authors review four theoretical models, namely modern portfolio theory, the capital asset pricing model, the Black-Scholes option-pricing model, and the Modigliani-Miller theory of corporate finance. Even though the discussions are very short, one has to admire the authors' ability to avoid complicated mathematics in discussing all of these theories without sacrificing clarity. The more mathematically-mature reader may perhaps be annoyed with the omission of mathematical formalism, but a natural question that might arise for such a reader is whether or not risk can indeed be put in a general axiomatic framework that will encompass all of its different manifestations, such as credit risk, operational risk, etc. Such a framework would allow a complete mathematical characterization of risk, and would allow various general and quantitative statements to be made about it.
Due to the extent of mortgage portfolios in the United States at the present time, and due to the sensitive dependence of their values on interest rates, the authors spend a fair amount of time discussing interest-rate risk and how to hedge it with derivatives. Thus they speak of the `sensitivity' of financial instruments to certain risk factors, and study the case of fixed-income products via the `DV01' risk measure, which is the change in value of a security after a change in interest rate of 1 basis point. This measure gives a `first-order' approximation to the change in yield, but the authors show how to obtain a `second-order' approximation using the `convexity' adjustment.
For complex portfolios, the most popular method for risk management has been the value-at-risk or VAR, and so it is not surprising that the authors devote an entire chapter to it in the book. The authors view it as a more sophisticated method because of its ability to deal with volatilities and correlations. However, they point out that its efficacy is restricted to relatively short time scales and under `normal' market conditions. The fiasco at LTCM (Long Term Capital Management) is discussed as an example of the failure of VAR to measure risk over long time scales and under abnormal market conditions. They do not however give any detailed evidence for this claim, but a perusal of the research literature (surprisingly rather slim) reveals that LTCM made "major" errors in terms of their risk management, if viewed from the standpoint of VAR. This still leaves open the question as to whether it made "major" errors from the standpoint of some other method for measuring and evaluating risk that is possibly radically different from VAR.
A Non-Mathematical Approach.......2006-04-19
The essense of investing is that increased risk should be compensated for by increased return. The problem lies in measuring and thus managing risk. Measuring risk is in the same category as predicting the future. The future is uncertain, the best guesses fail as bad weather, oil embargoes, or any of a whole list of other incidents change the situation.
Risk management isn't simply a matter of avoiding risk. It is instead a matter of identifying it, measuring it, appreciating its consequences and then taking actions accordingly. Insurance is perhaps the best example.
If a hundred sailing ships go out and 90 return, spreading the risk among all hundred ships compensates for the loss of the ten. And Lloyds is born.
During recent years several techniques have been developed to measure risk. This book discusses them in a non-mathematical way that can be used by both risk and non-risk professionals. In essence it brings sophisticated techniques to be accessible to a wide audience.
Book Description
A concise introduction to financial risk management strategies, policies, and techniques
This ideal guide for business professionals focuses on strategic and management issues associated with financial risk. Essentials of Financial Risk Management identifies risk-mitigation policies and strategies; suggestions for determining an organization's risk tolerance; and sources of risk associated with currency exchange rates, interest rates, credit exposure, commodity prices, and other related events. Examples illustrate risk scenarios and offer tips on an array of management alternatives, including changes in the way business is conducted and hedging strategies involving derivatives.
Download Description
A concise introduction to financial risk management strategies, policies, and techniques This ideal guide for business professionals focuses on strategic and management issues associated with financial risk. Essentials of Financial Risk Management identifies risk-mitigation policies and strategies; suggestions for determining an organization's risk tolerance; and sources of risk associated with currency exchange rates, interest rates, credit exposure, commodity prices, and other related events. Examples illustrate risk scenarios and offer tips on an array of management alternatives, including changes in the way business is conducted and hedging strategies involving derivatives.
Book Description
This digital document is an article from Strategic Finance, published by Thomson Gale on October 1, 2006. The length of the article is 451 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: An overview of financial risk management.(Essentials of Financial Risk Management)
Author: Paul Shillman
Publication:
Strategic Finance (Magazine/Journal)
Date: October 1, 2006
Publisher: Thomson Gale
Page: 23(1)
Distributed by Thomson Gale
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Business Reengineering: Effizientes Neugestalten von Geschäftsprozessen (Herausforderungen an das Management)
Manufacturer: Springer
ProductGroup: Book
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ASIN: 3540625461 |
Book Description
Die zunehmende Globalisierung zwingt die Unternehmen, wirtschaftlicher zu agieren. Die Organisation von Produktions- und Verwaltungsvorgängen nach Geschäftsprozessen bietet Möglichkeiten zur Effizienzsteigerung. Schnittstellen können reduziert werden, Vorgänge werden beschleunigt und die Möglichkeit des Outsourcing kann genutzt werden. In diesem Buch wird von führenden Fachvertretern aus Europa und den USA zur Frage Stellung genommen, in welchen Weisen ein Business Reengineering in allen betrieblichen Bereichen - vom Strategischen Management über das Marketing-, Operations-, Finance-Management bis hin zum Human-Resources-Management realisiert werden kann.
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Police and Judicial Co-operation in the European Union: FIDE 2004 National Reports
Manufacturer: Cambridge University Press
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ASIN: 0521605571 |
Book Description
Written for the XXI FIDE Congress taking place in Dublin in June 2004, this book is the most wide ranging and comprehensive international survey of the topic ever undertaken. It covers how 22 EU members (both current and accession states) are adapting their constitutions and criminal laws to provide for judicial and police co-operation with other member states with the aim of tackling cross-border crime. Each country’s report was submitted by a national expert in the field, and sets out in detail the legal instruments with which the EU is developing this area, and how states are meeting the challenge of adapting their laws. The reports also outline the problems encountered, and make suggestions as to how co-operation can be made more efficient whilst continuing to safeguard civil liberties.
Book Description
This volume presents papyri relating to public business of various kinds in Egypt from the middle of the 3rd century
BCE to 710
CE, thus including affairs in that country first when it was ruled by the Greek Ptolemaic kings, secondly when it was a Roman province. The earliest examples date from the reign of King Ptolemy II Philadelphus and the latest from the government by the Arabs after their conquest of Egypt in 639-641
CE.
The papyri chosen were all sent by persons in office (from king, Roman emperor, or governor downwards) or addressed to them or sent for their information: Codes and Regulations, 6 examples. Edicts and Orders, 26. Public Announcements, 6. Reports of Meetings, 3. Official Acts and Inquiries, 5. Judicial Business, 18. Petitions and Applications, 44. Declarations to Officials, 30. Appointments and Nominations, 7. Tenders and Contracts, 19. Receipts, 26. Orders for Payment, 6. Accounts and Registers or Lists, 12. Letters, 16. Notes on the systems of dating and of money in Egypt as well as a glossary of technical terms are provided.
The three-volume Loeb Classical Library edition of Select Papyri also includes a volume of poetry and one of private documents.
Book Description
The Global Corruption Report 2007 looks at how, why and where corruption mars judicial processes, and to reflect on remedies for corruption-tainted systems. The book focuses on judges and courts but situates them within the broader justice system - police, prosecutors, lawyers and agencies responsible for enforcing judicial decisions. It also looks at the social context of the judiciary and shows how societal expectations, the existence of non-state justice mechanisms and the strength of informal networks that circumvent the justice system, all have a bearing on judicial corruption. The book takes a close look at the two main judicial corruption problems: political interference and petty bribery by court personnel. The 37 country case studies and a series of concrete recommendations for judges, political powers, businesses, lawyers, prosecutors, academics, NGOs and donors are supplemented by 15 empirical studies of corruption in various sectors, including the justice sector.
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Economic Report of the President, 2006: Transmitted to the Congress February 2006 Together with the Annual Report of the Council of Economic Advisers
Manufacturer: Council of Economic Advisers
ProductGroup: Book
Binding: Paperback
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ASIN: 0160754186 |
Book Description
Contains the Economic Report of the President and the Annual Report of the Council of Economic Advisers.
Product Description
8 1/2" x 11" x 1/2" with black and white photographs, charts and illustrations and text giving the physical state of the county court house of NC as of 1978.
Product Description
Black and white photographs and illustrations plus charts and data defining the needs as of 1978 for the 100 various county courthouse facilities in NC 8.5" x 11 1"x 1 3/16"
Book Description
This report was created for global strategic planners who cannot be content with traditional methods of segmenting world markets. With the advent of a “borderless world”, cities become a more important criteria in prioritizing markets, as opposed to regions, continents, or countries. This report covers the top 2000 cities in over 200 countries. It does so by reporting the estimated market size (in terms of latent demand) for each major city of the world. It then ranks these cities and reports them in terms of their size as a percent of the country where they are located, their geographic region (e.g. Africa, Asia, Europe, Middle East, North America, Latin America), and the total world market. In performing various economic analyses for its clients, I have been occasionally asked to investigate the market potential for various products and services across cities. The purpose of the studies is to understand the density of demand within a country and the extent to which a city might be used as a point of distribution within its region. From an economic perspective, however, a city does not represent a population within rigid geographical boundaries. To an economist or strategic planner, a city represents an area of dominant influence over markets in adjacent areas. This influence varies from one industry to another, but also from one period of time to another. In what follows, I summarize the economic potential for the world\'s major cities for "academic caps and gowns and judicial, burial, choir, fraternal, and ecclesiastical vestments" for the year 2007. The goal of this report is to report my findings on the real economic potential, or what an economist calls the latent demand, represented by a city when defined as an area of dominant influence. The reader needs to realize that latent demand may or may not represent real sales. For many items, latent demand is clearly observable in sales, as in the case for food or housing items. Consider, however, the category "satellite launch vehicles". Clearly, there are no launch pads in most cities of the world. However, the core benefit of the vehicles (e.g. telecommunications, etc.) is "consumed" by residents or industries within the world\'s cities. Without certain cities, in other words, the market for satellite launch vehicles would be lower for the world in general. One needs to allocate, therefore, a portion of the worldwide economic demand for launch vehicles to both regions and cities. This report takes the broader definition and considers, therefore, a city as a part of the global market.
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China Human Development Report 2002: Making Green Development a Choice
Manufacturer: Oxford University Press, USA
ProductGroup: Book
Binding: Paperback
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ASIN: 0195936035 |
Book Description
This third China Human Development Report 2002, Making Green Development a Choice, looks at the environmental challenges facing China today especially in the context of its WTO entry and efforts towards a green and clean 2008 Olympics. The report argues that it is now time for the government
and people to respond to these challenges and make the right choices to achieve green development and a sustainable future.
What impacts do environmental changes have on people's health and livelihoods? How do environmental issues affect overall governance structure? The Report's first chapter begins with a review of China's people and their history and culture as the resource and foundation to build and modernize this
vast land. Chapter two assesses the current status of the environment and chapter three examines the forces and trends that determine environmental changes including the linkages between society and environment. Chapter four analyzes the ongoing efforts to put China on the right path and discusses
how the responses can be optimized. Chapter five concludes that today's decisions will have significant influence on the degree of sustainability in China's future development. A scenario approach is provided describing two alternatives: today's perilous path and tomorrow's green reform path.
Informative and readable, the China Human Development Report 2002 is an invaluable collection of solid statistics, in-depth analysis and thought-provoking ideas for people all over the world to better understand the general system of societal, environmental and economic factors that together make
China what it is today and what it can become in the future.
The China Human Development Report 2002 was commissioned by UNDP China and was prepared by a team of eminent development professionals under the leadership of Stockholm Environment Institute, an independent, international research institute specializing in sustainable development and environment
issues at the local, national, regional and global policy levels.
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The China Human Development Report
China United Nations Development Programme
Manufacturer: Oxford University Press, USA
ProductGroup: Book
Binding: Hardcover
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ASIN: 0195132114 |
Book Description
This publication is the first National Human Development Report (NHDR) for China. Taking its cue from the 1997 global Human Development Report, a first attempt is made in this report to rank according to a Human Development Index for provinces, autonomous regions, and municipalities in China. The theme of this report is poverty alleviation. The Report summarizes the history and current status of sustainable human development in China. It then looks at the outstanding challenges to be faced and makes a number of broad policy recommendations for tackling them. Because this is the first national HDR undertaken for China, it establishes a baseline for future efforts by discussing in detail a wide spectrum of development issues, including the distribution of income, health care, education and nutrition, population and migration, the status of women, employment, social security provision, the state of the natural environment, and the reform of state enterprises. This comprehensive report shows how the spectacular economic growth correlates with human/social development. This dialogue between the UNDP and China will be especially conducive to all future exchanges between China and foreign experts on social development. Anyone interested in China, in particular the international business community, will need this book to understand the current status and future prospects for human development among one fifth of the world's population.
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China Human Development Report 1999: Transition and the State
United Nations Development Programme
Manufacturer: Oxford University Press, USA
ProductGroup: Book
Binding: Paperback
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ASIN: 0195925866 |
Book Description
This book is about the changing role of the Chinese state during the transition from central planning to a civil society with a market economy. The discussion as a whole supports the case for a Chinese state that is vigorous and active, but in different ways than in the past. This book
contains the most up-to-date Human Development Index (HDI) numbers for China's provinces as well as the Gender Development Index.
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