Operational risk is being considered as an important risk component for financial institutions as evinced by the large sums of capital that are allocated to mitigate this risk. Therefore, risl measurement is of paramount concern for the purposes of capital allocation, hedging, and new product...

This paper explores the advantages of a new financial charter for large, complex, internationally active financial institutions that would address the corporate governance challenges of such organizations, including incentive problems in risk decisions and the complicated corporate and...

The Financial Sector Reforms Commission (FSLRC) which was set up in 2011 by the Ministry of Finance was mandated to study existing legislation and financial sector regulatory practices in India and to propose improvements. The FSLRC submitted its report in 2013 and four of its members recorded...

This paper examines the optimal design of and interaction between capital and liquidity regulations in a model characterized by fire sale externalities. In the model, banks can insure against potential liquidity shocks by hoarding sufficient precautionary liquid assets. However, it is never...

Among operational risk practitioners there is some confusion about the implications of the loss data collection threshold and the estimation of "truncated" or "shifted" distributions. Claims that "shifted" models result in biased parameter estimates rely on the premise that the "true" model is...

Analysis of the financial crisis has revealed not only major market and regulatory failures, but also shortcomings in supervisory approaches and in banks' systems of internal and external controls. These failures and shortcomings played a significant role in the origin and evolution of the...

This paper examines the manner in which Indian banks adjust their balance sheets to meet capital standards. The paper uses a partial adjustment framework with simultaneous equations to model bank behavior. The changes made by banks to capital ratios and risk levels are simultaneously analyzed....

After 1980's banks are becoming more international. Due to improved connectivity and increased operations of large MNCs, banking institutions are spreading their business over the political boundaries of nations. This trend also helps financial institutions to get geographical diversification...

The paper finds that, given New Zealand's conservative approach in implementing the Basel II framework, New Zealand banks' headline capital ratios underestimate their capital strength. A comparison with Canadian, UK and Australian banks highlights the impact of New Zealand's more conservative...

The paper aims to examine the new regulatory framework of project finance in the economics of banking firms. In particular, the paper investigates the uniqueness of the project finance, the significant importance of the project finance in bank activity, and the role of the new bank capital...