One of the reasons for firms decentralising aspects of their operations is to enable managers to gain specialised knowledge of local conditions. For credit managers in a banking firm, this may take the form of knowledge of investment opportunities and the risk profiles of each of these...

In 1987 Lopes developed Security/Potential, Aspiration (SP/A) Theory, a framework for risky choice under uncertainty. Similar to Prospect Theory, SP/A Theory seeks to combine the forces of Economics and Psychology. This means that the assumption that individuals make choices based on expected...

The role of economic capital has grown significantly in recent years. Although not a regulatory requirement, an increasing number of financial institutions use economic capital for such purposes as measuring and managing the performance of people, products, risk exposures, and to manage and...

A large body of the literature argues that the soundness of financial system is largely determined by the economic and institutional environment in which the financial system works. Drawing on this theoretical underpinning, research in this thesis models financial soundness indicators (FSIs)...

All banks must hold capital equal to the minimum regulatory requirement. However, in many cases the level of regulatory capital diverges from the actual (economic) capital held by banks. A bank's actual capital is typically linked to a target credit rating, which is in turn determined by the...

Extreme value theory (EVT) is regularly put forward by academics, practitioners and banking regulators as a methodology for measuring the likelihood of operational risk losses that have a very low probability of occurrence, but which have the potential for catastrophic outcomes in terms of...

It is somewhat ironic that while the major focus of regulators and institutions in the financial services sector over recent years has been on developing models for measuring and managing credit risk, most of the large losses in financial institutions over this time have been sourced to...

This paper develops a framework for examining the impact of changes in the solvency standard of a bank (target credit rating) on the pricing of bank assets. We show that the decision of a bank to increase its solvency standard increases the price of bank assets to the extent that a bank prices...

The purpose of this study is to demonstrate a method for estimating the tradeoffs that banking customers make between different attributes of a service, thus allowing businesses to estimate the likely impact on customer loyalty of changes in different attributes of a service. The data were...

This thesis argues that one type of multinational entity ? the multinational bank ? poses particularly significant challenges to the international tax regime in terms of its current profit allocation rules. Multinational banks are a unique subset of multinational entities, and as a consequence...