The Known, the Unknown, and the Unknowable in Financial Risk Management

The Known, the Unknown, and the Unknowable in Financial Risk Management
Author: Francis X. Diebold
Publisher: Princeton University Press
Total Pages: 392
Release: 2010-05-09
Genre: Business & Economics
ISBN: 0691128839

A clear understanding of what we know, don't know, and can't know should guide any reasonable approach to managing financial risk, yet the most widely used measure in finance today--Value at Risk, or VaR--reduces these risks to a single number, creating a false sense of security among risk managers, executives, and regulators. This book introduces a more realistic and holistic framework called KuU --the K nown, the u nknown, and the U nknowable--that enables one to conceptualize the different kinds of financial risks and design effective strategies for managing them. Bringing together contributions by leaders in finance and economics, this book pushes toward robustifying policies, portfolios, contracts, and organizations to a wide variety of KuU risks. Along the way, the strengths and limitations of "quantitative" risk management are revealed. In addition to the editors, the contributors are Ashok Bardhan, Dan Borge, Charles N. Bralver, Riccardo Colacito, Robert H. Edelstein, Robert F. Engle, Charles A. E. Goodhart, Clive W. J. Granger, Paul R. Kleindorfer, Donald L. Kohn, Howard Kunreuther, Andrew Kuritzkes, Robert H. Litzenberger, Benoit B. Mandelbrot, David M. Modest, Alex Muermann, Mark V. Pauly, Til Schuermann, Kenneth E. Scott, Nassim Nicholas Taleb, and Richard J. Zeckhauser. Introduces a new risk-management paradigm Features contributions by leaders in finance and economics Demonstrates how "killer risks" are often more economic than statistical, and crucially linked to incentives Shows how to invest and design policies amid financial uncertainty

The Known, the Unknown, and the Unknowable in Financial Risk Management

The Known, the Unknown, and the Unknowable in Financial Risk Management
Author: Francis X. Diebold
Publisher: Princeton University Press
Total Pages: 391
Release: 2010-04-19
Genre: Business & Economics
ISBN: 1400835283

A clear understanding of what we know, don't know, and can't know should guide any reasonable approach to managing financial risk, yet the most widely used measure in finance today--Value at Risk, or VaR--reduces these risks to a single number, creating a false sense of security among risk managers, executives, and regulators. This book introduces a more realistic and holistic framework called KuU --the K nown, the u nknown, and the U nknowable--that enables one to conceptualize the different kinds of financial risks and design effective strategies for managing them. Bringing together contributions by leaders in finance and economics, this book pushes toward robustifying policies, portfolios, contracts, and organizations to a wide variety of KuU risks. Along the way, the strengths and limitations of "quantitative" risk management are revealed. In addition to the editors, the contributors are Ashok Bardhan, Dan Borge, Charles N. Bralver, Riccardo Colacito, Robert H. Edelstein, Robert F. Engle, Charles A. E. Goodhart, Clive W. J. Granger, Paul R. Kleindorfer, Donald L. Kohn, Howard Kunreuther, Andrew Kuritzkes, Robert H. Litzenberger, Benoit B. Mandelbrot, David M. Modest, Alex Muermann, Mark V. Pauly, Til Schuermann, Kenneth E. Scott, Nassim Nicholas Taleb, and Richard J. Zeckhauser. Introduces a new risk-management paradigm Features contributions by leaders in finance and economics Demonstrates how "killer risks" are often more economic than statistical, and crucially linked to incentives Shows how to invest and design policies amid financial uncertainty

Managing Uncertainty, Mitigating Risk

Managing Uncertainty, Mitigating Risk
Author: Nick Firoozye
Publisher: Springer
Total Pages: 281
Release: 2016-04-20
Genre: Business & Economics
ISBN: 1137334541

Managing Uncertainty, Mitigating Risk proposes that financial risk management broaden its approach, maintaining quantification where possible, but incorporating uncertainty. The author shows that by using broad quantification techniques, and using reason as the guiding principle, practitioners can see a more holistic and complete picture.

Professional's Handbook of Financial Risk Management

Professional's Handbook of Financial Risk Management
Author: Lev Borodovsky
Publisher: Elsevier
Total Pages: 817
Release: 2000-02-25
Genre: Business & Economics
ISBN: 0080480446

Professional's Handbook of Financial Risk Management is a major reference work in finance. A complete practical reference book covering all aspects of financial risk management including an in-depth look at operational risk management, regulation, risk-based capital, and risk adjusted performance measurement. The book focuses on practical financial risk management techniques and solutions, and is designed to guide the risk professional step-by-step through the implementation of a firm-wide risk management framework. This book covers the various roles of the risk management function. Rather than describing every possible role in exhaustive detail, the authors have provided a story line for each of the discussed topics, including practical issues that a risk manager needs to consider when tackling the subject, possible solutions to difficulties that might be encountered, background knowledge that is essential to know, and more intricate practices and techniques that are being used. By providing these fundamentals, the novice risk professional can gain a thorough understanding of the topic in question while the more experienced professional can use some of the more advanced concepts within the book. Thus the book can be used to broaden your own knowledge of the risk world, both by familiarizing yourself with areas in which you lack experience and by enhancing your knowledge in areas that you already have expertise. All authors are leaders in their field who between them have the expertise and knowledge, both practical and theoretical, to produce this definitive risk management guide. The editors of this book, Marc Lore and Lev Borodovsky, are senior financial risk managers at Sanwa Bank (International) London, and Credit Suisse First Boston, USA respectively. They also run The Global Association of Risk Professionals (GARP), the industry association for financial risk management practitioners and researchers. Endorsed by GARP - Global Association of Risk Professionals Authored and edited by leading financial markets risk professionals International in coverage; the concepts and methods covered are not specific to any country or institution, but rather to the risk management profession as a whole

Financial Risk Management

Financial Risk Management
Author: Allan M. Malz
Publisher: John Wiley & Sons
Total Pages: 752
Release: 2011-09-13
Genre: Business & Economics
ISBN: 1118022912

Financial risk has become a focus of financial and nonfinancial firms, individuals, and policy makers. But the study of risk remains a relatively new discipline in finance and continues to be refined. The financial market crisis that began in 2007 has highlighted the challenges of managing financial risk. Now, in Financial Risk Management, author Allan Malz addresses the essential issues surrounding this discipline, sharing his extensive career experiences as a risk researcher, risk manager, and central banker. The book includes standard risk measurement models as well as alternative models that address options, structured credit risks, and the real-world complexities or risk modeling, and provides the institutional and historical background on financial innovation, liquidity, leverage, and financial crises that is crucial to practitioners and students of finance for understanding the world today. Financial Risk Management is equally suitable for firm risk managers, economists, and policy makers seeking grounding in the subject. This timely guide skillfully surveys the landscape of financial risk and the financial developments of recent decades that culminated in the crisis. The book provides a comprehensive overview of the different types of financial risk we face, as well as the techniques used to measure and manage them. Topics covered include: Market risk, from Value-at-Risk (VaR) to risk models for options Credit risk, from portfolio credit risk to structured credit products Model risk and validation Risk capital and stress testing Liquidity risk, leverage, systemic risk, and the forms they take Financial crises, historical and current, their causes and characteristics Financial regulation and its evolution in the wake of the global crisis And much more Combining the more model-oriented approach of risk management-as it has evolved over the past two decades-with an economist's approach to the same issues, Financial Risk Management is the essential guide to the subject for today's complex world.

Essentials of Risk Management in Finance

Essentials of Risk Management in Finance
Author: Anthony Tarantino
Publisher: John Wiley & Sons
Total Pages: 202
Release: 2010-12-01
Genre: Business & Economics
ISBN: 0470946350

A concise and and easy to follow introduction to financial risk management This basic survey text offers an accessible introduction to financial risk management, covered in its major components: credit, market, operational, liquidity, legal, and reputational, along with user-friendly processes and tools to conduct your own risk assessments and risk alignments. While there are some mathematical concepts included, these are kept at levels everyone will find easy to grasp. Provides a comprehensive overview of financial risk management, including credit, market, operational, liquidity, legal, and reputational risk areas Discusses the latest trends and next generation techniques emerging in financial risk management Provides risk assessment and risk alignment tools and examples This book offers a good basic understanding of the major areas of risk exposure that all organizations, both public and private, face in operating in today's complex global marketplace. It provides insights into best practices and next generation techniques for readers entering government, not-for-profit, business, and IT positions in which risk management will play an ever expanding role.

Financial Risk Management: An End User Perspective

Financial Risk Management: An End User Perspective
Author: Don M Chance
Publisher: World Scientific
Total Pages: 861
Release: 2019-10-07
Genre: Business & Economics
ISBN: 9811201854

In the field of financial risk management, the 'sell side' is the set of financial institutions who offer risk management products to corporations, governments, and institutional investors, who comprise the 'buy side'. The sell side is often at a significant advantage as it employs quantitative experts who provide specialized knowledge. Further, the existing body of knowledge on risk management, while extensive, is highly technical and mathematical and is directed to the sell side.This book levels the playing field by approaching risk management from the buy side instead, focusing on educating corporate and institutional users of risk management products on the essential knowledge they need to be an intelligent buyer. Rather than teach financial engineering, this volume covers the principles that the buy side should know to enable it to ask the right questions and avoid being misled by the complexity often presented by the sell side.Written in a user-friendly manner, this textbook is ideal for graduate and advanced undergraduate classes in finance and risk management, MBA students specializing in finance, and corporate and institutional investors. The text is accompanied by extensive supporting material including exhibits, end-of-chapter questions and problems, solutions, and PowerPoint slides for lecturers.

The Simple Rules of Risk

The Simple Rules of Risk
Author: Erik Banks
Publisher: John Wiley & Sons
Total Pages: 156
Release: 2003-03-14
Genre: Business & Economics
ISBN: 0470856319

In an age where companies and financial institutions are keenly focused on managing the financial risk of their operations, the implementation of quantitative methods and models has been of tremendous help. Tools such as VaR, credit VaR, risk-adjusted returns, and scenario analyses have given institutions the means to quantify and understand their risk profiles. However, the focus on quantitative risk management, while important, can sometimes be over-emphasized--at the expense of logic and experience. At its core, the successful management of risk is still largely an "art." The Simple Rules of Risk takes a fresh look at the qualitative aspects of risk management. It also considers how qualitative approaches can make optimal use of the mathematical aspects of risk management to create the most effective framework possible.

Financial Risk Management

Financial Risk Management
Author: Jimmy Skoglund
Publisher: John Wiley & Sons
Total Pages: 578
Release: 2015-09-04
Genre: Business & Economics
ISBN: 1119157234

A global banking risk management guide geared toward the practitioner Financial Risk Management presents an in-depth look at banking risk on a global scale, including comprehensive examination of the U.S. Comprehensive Capital Analysis and Review, and the European Banking Authority stress tests. Written by the leaders of global banking risk products and management at SAS, this book provides the most up-to-date information and expert insight into real risk management. The discussion begins with an overview of methods for computing and managing a variety of risk, then moves into a review of the economic foundation of modern risk management and the growing importance of model risk management. Market risk, portfolio credit risk, counterparty credit risk, liquidity risk, profitability analysis, stress testing, and others are dissected and examined, arming you with the strategies you need to construct a robust risk management system. The book takes readers through a journey from basic market risk analysis to major recent advances in all financial risk disciplines seen in the banking industry. The quantitative methodologies are developed with ample business case discussions and examples illustrating how they are used in practice. Chapters devoted to firmwide risk and stress testing cross reference the different methodologies developed for the specific risk areas and explain how they work together at firmwide level. Since risk regulations have driven a lot of the recent practices, the book also relates to the current global regulations in the financial risk areas. Risk management is one of the fastest growing segments of the banking industry, fueled by banks' fundamental intermediary role in the global economy and the industry's profit-driven increase in risk-seeking behavior. This book is the product of the authors' experience in developing and implementing risk analytics in banks around the globe, giving you a comprehensive, quantitative-oriented risk management guide specifically for the practitioner. Compute and manage market, credit, asset, and liability risk Perform macroeconomic stress testing and act on the results Get up to date on regulatory practices and model risk management Examine the structure and construction of financial risk systems Delve into funds transfer pricing, profitability analysis, and more Quantitative capability is increasing with lightning speed, both methodologically and technologically. Risk professionals must keep pace with the changes, and exploit every tool at their disposal. Financial Risk Management is the practitioner's guide to anticipating, mitigating, and preventing risk in the modern banking industry.

Financial Risk Management

Financial Risk Management
Author: Steve L. Allen
Publisher: John Wiley & Sons
Total Pages: 612
Release: 2012-12-26
Genre: Business & Economics
ISBN: 111817545X

A top risk management practitioner addresses the essential aspects of modern financial risk management In the Second Edition of Financial Risk Management + Website, market risk expert Steve Allen offers an insider's view of this discipline and covers the strategies, principles, and measurement techniques necessary to manage and measure financial risk. Fully revised to reflect today's dynamic environment and the lessons to be learned from the 2008 global financial crisis, this reliable resource provides a comprehensive overview of the entire field of risk management. Allen explores real-world issues such as proper mark-to-market valuation of trading positions and determination of needed reserves against valuation uncertainty, the structuring of limits to control risk taking, and a review of mathematical models and how they can contribute to risk control. Along the way, he shares valuable lessons that will help to develop an intuitive feel for market risk measurement and reporting. Presents key insights on how risks can be isolated, quantified, and managed from a top risk management practitioner Offers up-to-date examples of managing market and credit risk Provides an overview and comparison of the various derivative instruments and their use in risk hedging Companion Website contains supplementary materials that allow you to continue to learn in a hands-on fashion long after closing the book Focusing on the management of those risks that can be successfully quantified, the Second Edition of Financial Risk Management + Websiteis the definitive source for managing market and credit risk.