I investigate sovereign risk management using expected utility theory. A proposition is derived under which conditions which degree of hedging is optimal. An application to the case of Russia shows that a risk-acceptant attitude can serve as an explanation of the decisions to bail out Rosneft...

If the creditworthiness of a counterparty is a derivative of a commodity price, there is the potential to have right- or wrong-way exposures in commodity transaction. Identifying them is important, because otherwise credit costs are inadequately calculated. This is especially important if one...

If the creditworthiness of a counterparty is a derivative of a commodity price, there is the potential to have right- or wrong-way exposures in respective commodity transaction. Identifying them is important, because otherwise credit costs might be inadequately calculated and wrong incentives...

The European Markets Infrastructure Regulation (EMIR) allows burdening a clearing obligation on non-financial corporations, which formerly did not necessarily clear their business. We give 10 recommendations on how to cope with this obligation. These are motivated by a case study for which we...

Based on the most recent annual reports of HC we check its risk management. Since cement is manufactured through an energy-intensive process, the focus is on energy price risk. HC has been taken by surprise by soaring energy prices in Q1, Q2, Q3 and Q4 2018. This has led to (repeated) downgrades...

Based on the most recent annual report of thyssenkrupp we look for various features of modern risk management. It appears that there could be challenges to have a full view of low probability and high impact risks, to be able to perceive concentration as well as wrong way risks and to capture...

Firstly, two seemingly unrelated topics of Russian politics are investigated. It is shown that under expected utility maximization the assumptions of an unbiased oil forward market and a risk-acceptant attitude (strictly convex utility function) of president Putin are sufficient to explain...