Considers whether financial risk management is value‐adding. Although risk management can reduce total risk, this may not affect the cost of capital or firm value. Well‐diversified investors have already eliminated all of the specific risk, and risk‐management may be seen as a zero NPV...

The drive to eliminate losses leads to greater emphasis on risk‐control measures. Argues that risk management can be transformed through the use of behaviour‐based risk management techniques.

In this series of extracts from the concluding chapter of Acharya’s book, Asset Management: Equities Demystified, the author argues that the major factor in future developments will be legislation and regulation. But she suggests that ultimately knowledge management will be the crucial...

With the need to expel huge amounts of non‐performing loans from their balance sheets, their share prices sinking and their credit ratings lowered, Japan’s banks are struggling to raise new capital and may face collapse. But the current crisis could have been avoided. If they had implemented...

UK companies face an increasingly aggressive regulatory environment. A recent study by the LSE shows that UK directors are ill‐equipped to deal with increasing regulatory risk. While they are aware of these growing risks, almost a third of boards do not know about the activities in their...

Research carried out by KPMG shows that a growing number of asset managers are seeking out high standards of governance as the criteria for their risk‐management assessment of a company as a possible investment. The author provides an overview of the research findings and a guide to how to...

The author looks back over ten years of the UK asset and liability management profession and compares the US and UK banking industries. He suggests that the value of ALM techniques is still undervalued and left to specialists rather than being embraced by the banking business.

The author suggests that methods for rating investment risk are flawed. He suggests a risk analysis, management and projects (RAMP) approach. Number‐crunching will produce better results than listening to analysts.

Advances in market risk management have had a huge impact on asset liability management in recent years, enabling the most advanced institutions to analyze their balance sheet risks in a much more realistic and dynamic way. In future, as risk management develops still further and computing power...

Life is becoming tougher and tougher for banks. The author shows how a series of fundamental techniques, like funds transfer pricing, can make life simpler when used under an economic value management framework and can provide banks with the extra competitive edge that they need.