Looks at the present state-of-the-art in global financial risk management, and then at the innovations and solutions that are being developed to solve the problems with current methodologies. The author presents a closely reasoned explanation of why the traditional quantitative methods are no longer adequate and argues the case for the hybrid instrument that will arise from the merging of the capital and insurance markets. New Ways for Managing Global Financial Risks will allow readers to think differently about how global financial risk is managed, and how to simplify the process.
Author(s): Hyman M.H.
Publisher: Wiley
Year: 2005
Language: English
Pages: 168
New Ways for Managing Global Financial Risks......Page 4
Contents......Page 10
Acknowledgements......Page 12
Introduction......Page 14
1 The Traditional Capital Market Pipeline......Page 20
Traditional banking industry organization......Page 21
Product alignment......Page 22
Bank consolidations......Page 23
Global financial risk-underwriting capacity......Page 27
Proprietary trading......Page 29
Basel II......Page 33
Conclusion......Page 35
Introduction......Page 38
The corporate problem......Page 41
The insurance company problem......Page 58
The pension fund problem......Page 64
Conclusion......Page 70
3 The Status Quo......Page 72
Derivative instruments......Page 73
Will management change their behaviour?......Page 80
New accounting rules......Page 83
Basel II......Page 88
Corporates......Page 89
The insurance industry......Page 95
Pension funds......Page 100
Conclusion......Page 101
Managing the unexpected......Page 102
Set and forget budget assurance......Page 104
Cost efficiency......Page 107
Hedge efficiency......Page 108
Bundling......Page 110
Market pricing......Page 111
Underwriting capacity – counterparty diversification......Page 112
Simplicity......Page 114
Conclusion......Page 115
Introduction......Page 116
A new method......Page 117
A new process......Page 120
A new instrument for managing global financial risks......Page 124
Absolute volatility......Page 131
Relative volatility......Page 133
A new investment discipline......Page 135
The instrument and its creation......Page 138
Investment discipline (underwriting the instrument)......Page 139
Case study one – emerging market currencies......Page 142
Case study two – balance sheet risks......Page 145
Case study three – insurance company reserves (a bond portfolio)......Page 146
Case study four – an equity volatility assurance transaction......Page 147
Case study five – a global bank using a currency volatility assurance transaction......Page 151
Case study six – pension fund solutions......Page 154
7 Conclusion......Page 160
References......Page 162
Index......Page 166
