Product Description

A new perspective on risk management
Risk management has evolved to address the more strategic issue of optimization of return on risk. This has been accompanied by statistical, mathematical, and financial techniques which-when actively applied-can aid an institution in producing disproportionately high returns on risk. Adding Value Through Risk Management aims to describe these techniques, illustrate their application, and discuss their strategic value for financial institutions.
David Belmont is Director of Group Risk Control for Nexgen Financial Solutions Group (NFS).

Product Details

• Amazon Sales Rank: #9020 in Books
• Published on: 2004-02-18
• Original language: English
• Dimensions: 9.19" h x .98" w x 6.46" l, 1.36 pounds
• Binding: Hardcover
• 300 pages

Book Info
Text covers the strategic aspects of risk management, providing an understanding of risk optimization, capital allocations, and capital restructuring. For financial executives.

From the Inside Flap
The typical financial executive’s view of the value of risk management in their financial institution is based on the belief that risk management focuses on loss avoidance. This view is based on the history of risk management being control focused. However, risk management has evolved rapidly to address the more strategic issue of optimization of return on risk. This evolutions has been accompanied by statistical, mathematical and financial techniques which, when actively applied, can produce disproportionately high return on risk.

Given that financial institutions will have to make significant investments in their risk management systems to comply with the regulatory capital calculation requirements of BIS II, the book shows how to leverage this investment to extract shareholder value. Key concepts illustrated and explained in detail include:

• Opportunity costs of capital
• Economic profit
• Risk adjusted returns on capital
• Economic capital measurement and their relationship to economic capital allocation
• Capital structuring
• Capital budgeting

The use of risk adjusted performance information in the formulation of management strategies that seek to optimize return to shareholders are discussed in depth and illustrated by practical case studies of several leading financial institutions. Finally, practical incentive and technology challenges are addressed and pragmatic recommendations for overcoming these challenges are given.

The book aims to describe these techniques, illustrate their application, and discuss their strategic value in the management of financial institutions.

From the Back Cover
The typical financial executive?s view of the value of risk management in their financial institution is based on the belief that risk management focuses on loss avoidance. This view is based on the history of risk management being control focused. However, risk management has evolved rapidly to address the more strategic issue of optimization of return on risk. This evolution has been accompanied by statistical, mathematical and financial techniques which when actively applied can direct an institution towards risk taking those activities, which produce disproportionately high returns on risk. The book aims to describe these techniques, illustrate their application, and discuss their strategic value in the management of financial institutions.