Global insurance regulation and systemic risk
... Evolution of the systemic risk debate
Systemic risk originally constrained to banking sector as a result of asset-liability and
duration mismatch and highly correlated assets (prone to same shocks) causing banks
to fail in clusters
back to the future? basel iii and basel ii
... • Market-friendly: based on markets’ best
practices in risk measurement (inducement
instead of compulsion; working through
private financial practices)
• Role for market discipline
presents at the Humboldt Distinguished Lecture Series in Applied Mathematics
... system. The first two lectures will address contingent capital for banks in the form of debt that converts to equity when a
bank nears financial distress. Contingent capital offers a promising potential solution to the problem of banks that are too big
to fail, but the design of these securities and ...
The effects of size and market concentration in banking market on
... The global financial crisis showed the costly consequences that a failure in the financial markets may have on
the rest of the economy, both in terms of output loss as in the cost of bank bailouts. Under the classical
framework of structure-conduct-performance, this study aims to determine how the s ...
... price loss to “Captive Investors” – pensions, insurance companies, local governments.
* Cash Flow Analysis – higher timely liquidity and increased safety, reduced market risk.
Focus – increase income – budget – lesser degree – market price fluctuations.
Presentazione di PowerPoint
... Government interventions have been of three kinds: guarantees, recapitalisation, and
impaired assets relief.
In many countries government guarantees have been extended to banks’ liabilities:
this has been the most cost-effective way for restoring confidence of investors as it
is a contingent lia ...
ART can mitigate economic fallout
... trigger points. In essence, the sizeable deductible will attract competitive market pricing that
rewards the corporate for its prudent risk management; but, by using the capacity
aggregation structure, the corporate will not leave its balance sheet exposed to the cash flow
effect of the loss in the ...
Objectives of a Sound Enterprisewide Risk
... Manage uncertainty embedded in business operations in order to
– increase confidence in the achievement of the bank’s objectives,
– protect its reputation and
... paid by another, etc.
Each loan is an obligation that bank does
not have ability to pay on time—“sale of
what you don’t have”
“Two sales in one”: Fulfillment of one
contract is conditioned on another
FINANCIAL RISK MANAGEMENT
... FINANCIAL RISK MANAGEMENT
This course will focus on variety of risks faced by financial
managers and the tools available for managing these risks.
Particularly, we shall focus on credit risk, interest rate and liquidity
risks, market risk, foreign exchange risk and country risk. We ...
Restructuring Distressed Financial Institutions
... shortages, NPL s and asset quality troubles,
capital erosion or reputational issues) are not
Causes can generally be tracked down to
poor management of credit risk (lending
standards, excessive risk taking, loan
concentration, fraud..), or
to the impact of specific risk factors (market ...
Market Risk Management guideline for Co
... CFI investments may suffer a loss if there is a fall in the market value of an
investment. This is called ‘market risk’ or sometimes ‘price risk’.
There are three major types of market risk:
a) Interest-rate risk: - If interest rates rise the value of assets that promise a return
at a fixed rate wil ...
US ORSA Requirements
... GAO Report
“NAIC also expanded its Capital Markets Bureau activities
during the crisis to help analyze information on the insurance
industry’s investments, such as exposure to potential market
volatility, said NAIC officials.
For example, one state said that the report on the effects of
the Europea ...
Policy Actions to Mitigate Bank
... gains and socializing losses. Participants in no other industry
get as self-righteously angry when public officials –
particularly, central bankers – fail to come at once to their
rescue when they get into (well-deserved) trouble.” (Martin
Wolf, Financial Times, Jan 15, 2008).
... • Take lag effects into account
• For insurance companies generally results
in larger betas
In finance, systemic risk is the risk of collapse of an entire financial system or entire market, as opposed to risk associated with any one individual entity, group or component of a system, that can be contained therein without harming the entire system. It can be defined as ""financial system instability, potentially catastrophic, caused or exacerbated by idiosyncratic events or conditions in financial intermediaries"". It refers to the risks imposed by interlinkages and interdependencies in a system or market, where the failure of a single entity or cluster of entities can cause a cascading failure, which could potentially bankrupt or bring down the entire system or market. It is also sometimes erroneously referred to as ""systematic risk"".