" The biggest Shortcoming of the recent reforms to the stabilization of the #financialsystem, such as #baseliii and the American #doddfrankact Act, is that they increase the #capitalrequirements rather than the causes of the increased #risk. It would generally be better to forbid risky and complex #financialproducts than to further increase #regulation complexity."
"This paper investigates the relationship between #geopoliticalrisk and #financialstress using a bivariate #var model. The study uses the #gpr Index to measure geopolitical risk and the OFSR FSI index to measure financial stress over a period of 06 January 2000 - 03 March 2023 on daily data. The results show a significant relationship between financial stress and geopolitical risk"
"We find that the more risky the #insurer ’s #investmentportfolio is, the more #risk the insurer tends to #transfer to the #reinsurer."
#insurance#climaterisk"This paper discusses the relationship between the financial constraints faced by infrastructure assets due to #floodrisk exposure and their ability to finance adaptation to such #risks through internal resources. #risktransfer mechanisms such as #floodinsurance were shown to be a consistent channel leading to increases in #riskreduction through adaptation. "
#operationalrisk #oprisk #fraud #marketabuse #riskmanagement"Our DD analysis reveals that #workingfromhome lowers the likelihood of securities #misconduct; ultimately those working from home exhibit fewer misconduct alerts."
This paper explores potential revisions to the calculation of the #solvencyII#risk margin (RM) and contributes to the ongoing discussion by formally defining the concept of capital-on-capital cost. The paper highlights the need for practitioners to consider capital-on-capital costs in their #lifeinsurance#riskmanagement frameworks and for policymakers to carefully evaluate the potential impact of any revisions to the calculation of the RM.
This study examines the relationship between reputational events and business sustainability by assessing the effects of such events on the share prices/market capitalisations of FTSE/JSE Top 40 Index entities. Using event study methodology and Tobin’s Q ratio, the study found that reputational events are associated with significant negative cumulative average abnormal returns on the day of the event announcement and for a period thereafter, highlighting the need for listed firms to include #reputationalrisk within their #riskmanagement management frameworks and for practitioners to implement reputation management strategies.
This working paper analyzes whether the #boe has a legal obligation to adjust #capitalrequirements for #financialinstitutions in response to the #climatecrisis. The paper argues that the BoE, as a public authority, must abide by the #humanrights obligations set out in the European Convention on Human Rights, which are deeply intertwined with climate concerns.
This article addresses the increasing concern of investors regarding corporate wrongdoing impacting a company's stock price, particularly regarding #esgrisk. The article argues that courts should not dismiss ESG securities #fraud cases as mere puffery, but instead focus on whether the corporation and its managers knew of a material #risk of an #esg problem but deceptively obscured that risk in its communications with investors.
This article discusses the need for high-level frameworks to guide the #regulation of #artificialintelligence (#ai) technologies. It adapts a #fintechinnovation Trilemma framework to argue that regulators can prioritize only two of three aims when considering AI oversight: promoting #innovation, mitigating #systemicrisk, and providing clear #regulatoryrequirements.