Search results for "financial risk"
showing 10 items of 44 documents
Financial Literacy in the Twenty-First Century: An Introduction to the International Handbook of Financial Literacy
2016
Market risk disclosure in banking: an empirical analysis on four global systemically important European banks
2017
Market risk reporting in banking has assumed such importance during the last decade. The purpose of this paper is to provide a methodology to evaluate the qualitative and quantitative profiles of the market risk disclosure in banking. We propose a hybrid methodology to assess whether or not banks are able to provide a satisfactory degree of information about the market risks they are exposed to. In this paper, we conduct an empirical research of market risk disclosure on a sample of four global systemically important European banks. The paper provides evidences that banks differ in their market risk reporting models, even though they are subject to similar regulatory requirements and accoun…
Finding socially responsible portfolios close to conventional ones
2015
Abstract An increasing number of investors are interested in sustainable, responsible and impact investment (SRI). However, there is a concern about the possible financial sacrifice associated to this kind of investments. The design of Decision Support Systems assisting socially responsible investors in their investment decisions can contribute to stimulate SRI. In this paper the financial content of a portfolio selection model is discussed in order to justify that it can be integrated into a Decision Support System designed for investors interested in socially responsible investment but initially reluctant to pay a financial cost in exchange for increasing the social responsibility of thei…
Democracy, political risks and stock market performance
2015
We study whether the emerging stock markets’ performance is affected by direct and indirect effects of democracy level and political risk. We argue that the relationship between democracy level and the political risk is parabolic instead of a simple linear relation i.e. there exists a limit in democracy after which the political risk begins to decline and this is reflected in stock prices. Using panel data for 38 emerging markets at yearly frequency and controlling for several domestic and international factors, we find a fairly robust evidence that during the period 2000-2010, this relationship is true and after some threshold, the more democratic countries produce higher returns. Similar …
The potential of rotorcraft for intercity passenger transport
2007
Abstract There are many high-speed rail projects in Europe at different stages of development. They are supported on environmental grounds and as a means of reducing congestion on other modes, including aviation. High-speed rail, however requires major investment costs, takes a long time to come online, and involves considerable financial risks. A potential alternative that overcomes some of these problems makes use of rotorcrafts. This paper assesses the potentiality of civil rotorcrafts as part of the air transport system. Discrete mode choice models are used to forecast traveller choice behaviour when the rotorcraft is introduced and financial evaluations performed looking at the operati…
Credit Risk Versus Performance in the Romanian Banking System
2017
Abstract The Romanian banking sector, predominantly governed by the capital of foreign banks, is, as well as other international banking sectors, under the sign of the necessary balance that should exist between risk and performance. This is a result of banks trying to take risks that they can control, given that they need to generate financial results that are satisfactory for all categories of bank creditors, namely shareholders, depositors and other lenders. In this paper, I wanted to analyze the risk situation assumed by the main banks in the system versus the performance gained in recent years. This article is part of a wider research, so I will refer only to the main risk assumed by a…
The Risk-Relevance of Accounting Data: Evidence from the Spanish Stock Market
2006
This paper analyses the relevance of accounting fundamentals to inform about equity risk as measured by the cost of equity capital. Assuming the latter is a summary measure of how investors make decisions regarding the allocation of resources, the strength of the association between the cost of capital and the accounting-based measures of risk indicates how important these measures are for market participants when making economic decisions. To infer the cost of equity capital, we use the O'Hanlon and Steele's method, which is based on the residual income valuation model. Moreover, we use the insights from this model to provide a theoretical underpinning for the choice of the accounting vari…
Risk Assessment and Analysis
2014
Once threats are identified, they must be assessed or evaluated, which is the objective of this chapter. There is usually a large number of threats, making it impossible or unprofitable to analyze them all, meaning selection of the threats that will be addressed is important. It is a decision-making process; an example is proposed and solved by one of the many techniques available. The chapter proposes a very standard requested study, which is the assessment of the economic and financial risks of a project. This is done through a real-life-example, followed by another appraisal, this time devoted to economic issues, as well as another for transportation, introducing the important concept of…
Beyond the Law and Finance Approach: The Shareholders' Cognitive Role and Its Effects on the Analysis of Ownership Structure and Corporate Governance
2004
The dominant law and finance approach of ownership structure and corporate governance is based on an unrealistic assumption, that of a total complete separation between ownership and control, in particular in the European nations. This approach based on the seminal Berle and Means' analysis and on agency theory, postulates that shareholders carry only a financial function limited to equity financing and assumption of financial risk. In view of the actual ownership structures, this approach has a weak explanatory power. Therefore, this article proposes another model, based on the cognitive role - directing and contribution of competences -, that the main shareholders often keep. It is possib…