This paper introduces a multivariate sparse multiscale Bernstein polynomial model for copula dependence structures, utilizing a Bayesian spike-and-slab prior. The method enhances efficiency by preserving significant components, reducing computational demands, and enabling practical applications in multivariate density estimation, particularly for financial risk forecasting.
Increasing climate risk has made insurance unaffordable or unavailable in many areas. A study on Australia's government-provided, mandatory reinsurance for cyclone damage shows it decreases home insurance premiums by 21% and increases availability by 11%. The policy reduces costs associated with correlated risks and boosts market competition.
Banking regulations encourage banks to invest in "risk-free" government bonds, affecting financial stability. This study reveals governments exploit this to increase fiscal flexibility. Zero-risk weighting of sovereign bonds lowers borrowing costs, promotes over-borrowing, and undermines fiscal rules.
“Effective regulation is cyclical, aligning with economic cycles, but it is counter to the laissez-faire approach. We demonstrate that simple leverage constraints can bring the decentralized economy close to the optimal allocation.”
This report uses UK fire statistics to model insurance claims for a company next year. It estimates the total sum of claims by modeling both the number and size of fires as random variables from statistical distributions. Monte Carlo simulations in R are used to predict the probability distribution of total claim costs.
Financial institutions must enhance cyber defenses and regulatory frameworks must adapt to new risks. International agencies are creating coherent cybersecurity standards, exemplified by the EU's Digital Operational Resilience Act (DORA). Effective defense also requires robust institutional governance and sector-led standards.
“... we argue there are good reasons for skepticism, as many of its key operative provisions delegate critical regulatory tasks to AI providers themselves, without adequate oversight or redress mechanisms. Despite its laudable intentions, the AI Act may deliver far less than it promises.”
“... we analyse the regulatory necessity in introducing a coercive regulatory framework, and second, present the regulatory concept of the AI Act with its fundamental decisions, core provisions and risk typology. Lastly, a critical analysis points to shortcomings, tensions and watered down assessments of the Act.”
"the typical organization loses 5% of revenues yearly because of fraud. Businesses are subject to fraud risk, and it is critical for organizations to put in place effective control mechanisms to prevent fraud".
“... a greater focus on ESG risks is more in line with banks characterized by traditional activities.”