Duration is the effective maturity of a security because it can account for the interim cash flows. Traditionally duration as a risk management tool has focused on bond portfolios, however Melanie Ferger, an exchange student from Germany looked at the tool in relation to asset and liability management from a financial institution’s viewpoint. The theme of her project sought to validate her hypothesis that duration could be used as an effective interest rate management tool for the liability side of a financial institution’s balance sheet. ...[ Read More ]

Effective risk management results in cultural change and a significant shift in the way business is done. ...[ Read More ]

The old ways of the last century are no longer acceptable; the focus of shareholder value is an old measure of success that has run its day. Unfortunately most of the large companies in existence today have not realised this yet and continue on the pathway to future destruction. The attitude of financial markets reinforces this delusion ...[ Read More ]

To try and define the concept of risk management so that common ground can be set, ...[ Read More ]

Bankers have a duty to contribute to the development of risk management as a separate business discipline. MICHAEL VINCENT of Monash University, Australia, looks at some of the tools used by financial institutions – duration, value of risk, value at risk – and how the management of risk should be structured ...[ Read More ]

The above describes a very narrow definition of corporate governance, that is the ability of the owners to ensure the managers act in accordance with the guidelines of the company and have accountability sheeted home. ...[ Read More ]

The aim of the first weekend activity for the CPRM was to set a minimum hurdle for the Institute to move to certification of the individual participants, it set a benchmark of language and culture so that risk managers from all professions attending both public and private could understand one another. All three groups had a different identity and personality based on the individuals and locations, however the real thrill for the panel of presenters was that by different paths and discussions all activities ended at the same point in the acceptance of risk and the understanding of ownership by all in an inclusive not exclusive way. ...[ Read More ]

Risk management is still in the process of becoming a core business activity, ever year the interest increases. However the profession is blurred because of the inability of risk practitioners to understand and encompass an integrated viewpoint. ...[ Read More ]

Risk managers need to be aware of likely reactions from corporations who are striving to make themselves a viable investment vehicle for the institutional investor. The institutional investor is in its pure form essential for the corporate as they provide essential liquidity to the investment market. However it is the way corporations react that makes the market an inhibitor to individual corporate growth, if not the whole market. ...[ Read More ]

The insurance purchasing decision is vital to the risk management function within the firm, indeed it is an outcome of good risk management and one of the five major methods of risk transfer. The industry needs to design the right products that fit the needs of the market today, a large proportion of insurance products on sale are out of date and rely on out of date for pricing and implementation. ...[ Read More ]